MaPS issues call for evidence on debt advice clients with deficit budgets

The Money and Pensions Service (MaPS) has announced a call for evidence on debt advice clients with deficit budgets.

MaPS says that the purpose of this call for evidence is to understand what help can, or could, be offered where a client presents with a deficit budget, as well as what MaPS can do to enable this help to be given.

Debt advice clients with deficit budgets have been increasingly discussed throughout the sector in recent years. The challenges facing organisations when trying to assist these clients were much considered by the Debt Challenge Group set up in response to the UK Strategy for Financial Wellbeing.

Commenting on the proposal Kevin Still, Director at DEMSA said “In line with some of the creditor and debt advice recommendations from the Statutory Debt Repayment Plan (SDRP) consultation, MaPS is looking at how advice providers and creditors could work together to deliver better outcomes for clients, based on a shared understanding of clients and their needs. This will also be relevant to FCA Consumer Duty planning in terms of delivering better outcomes. Meaningful customer cohorts with evidence of financial vulnerability will undoubtedly come under regulatory scrutiny. The deadline for responses is 1 December 2022. DEMSA will respond, as this is a really important topic for the industry as a whole.”

“Debt advice agencies in the for-profit and not-for-profit sectors have highlighted the rise in deficit budgets in their SDRP responses to HM Treasury on 5 August 2022. Debt solution providers are flagging the increase in cases with priority arrears, with energy costs being a prime example ahead of October’s increases. As previously reported, on 17 August 2022, energy regulator Ofgem published support guides for bill payers struggling with their energy costs as they continue to rise alongside wider cost-of-living pressures caused by ever increasing inflation and interest rates.”