Credit, Collections & Insolvency News
The Queen’s speech had announced plans for the Financial Guidance and Claims Bill. The bill’s key elements will focus on:
Charles Counsell Chief Executive Officer at the Money Advice Service (MAS) said “We welcome the Government’s announcement of the creation of the new Single Financial Guidance Body. This will give a more joined-up offering to customers across debt advice, pensions advice and broader money guidance.
“We need to make sure people are able to access high-quality help with money issues and help prevent people getting into financial difficulties in the first place. “Critically, the new body will also carry on the important work underway through the Financial Capability Strategy to improve people’s ability to manage their money effectively.
“At MAS we look forward to working with Government and colleagues at The Pensions Advisory Service and Pension Wise on the formation of the new body. This is an exciting day for all those who care passionately that people should be given help to understand and deal with financial issues. Most importantly it is excellent news for the millions who will get real, practical, free and impartial help.”
Mike O’Connor, Chief Executive of StepChange Debt Charity, said: “Household debt is high by historical standards and consumer borrowing continues to head towards levels not seen since the economic crisis. Millions of households are resorting to credit as the only way to keep up with essential household bills. And millions more face the risk of falling into serious financial hardship in the future. Any further squeeze on household finances could have serious consequences. Dealing with problem debt needs to become a priority for the new Government.
“There is cross-party support for the introduction of a ‘Breathing Space’ scheme that would give individuals and families better protections and a safer way to get back onto a firmer financial footing. While we are disappointed that these proposals were not referenced in the Queen’s Speech, we remain hopeful that such a scheme will be implemented as soon as possible to help prevent those who need it the most from falling further into a downward spiral of increasing debt. We will continue to work with the Government to make the scheme a reality.”
Citizens Advice Chief Executive Gillian Guy said “The contents of this Queen’s Speech will go some way toward tackling some of the biggest challenges facing our clients and consumers. Too many people are being denied their rights at work and others are struggling with rental fees and high energy bills, so it’s good to see that this will be a focus for the parliament and government over the next two years.
“With the single financial guidance body there is a real opportunity to make sure people are getting the independent and impartial guidance they need to plan and manage their finances. It’s also important that, as the Queen’s Speech sets out legislation that will lead to the UK’s exit of the EU, the government provides information and advice to people about the impact of Brexit on them and their family, and protects workers’ and consumers’ rights.”
R3 welcomes the inclusion in the Queen’s Speech of plans to push ahead with consumer reforms for the creation of a ‘Single Financial Guidance Body’.
Adrian Hyde says: “A new single advice body would be welcome, and the provision of debt advice should remain a government priority. Any new body should look also look at how people in debt sort out their situation and at the stigma associated with debt and insolvency. We look forward to working with any new body to break down barriers that stop indebted individuals from getting the advice they need and dealing with their debts in an appropriate manner.”
The government’s commitment to reform of mental health services is also welcome. R3’s recent research has found that personal finance issues have a significant impact on people’s mental health, while those in mental distress may find it far harder to deal with their finances, allowing debts to spiral out of control.
It looks like the door could still be open to introduce a ‘Breathing Space’ from creditors for indebted individuals. Since 2015, R3 has called on the government to give financially indebted individuals a 28-day break from creditor action – ‘Breathing Space’ – to use as a final opportunity to receive professional advice.
Adrian Hyde says: “It’s vitally important that indebted individuals end up in a debt solution appropriate to their situation. This doesn’t always happen, and the difficulty of being able to get professional, independent advice in a relatively unpressured environment is a factor.
“A short ‘Breathing Space’ would give people in debt the chance to seek advice and deal with their debts effectively. Both the Conservatives and Labour parties featured ‘Breathing Space’ in their manifestos, which will make it easier for the government to pass any Bill containing this proposal.”
He adds: “The length of the ‘Breathing Space’ matters: too long and it’s not fair on creditors and it may discourage lending. The government should make sure it listens to creditor voices when it consults on the proposals.”
