Millions of people with problem debt, including those facing
mental health problems, will be helped by the government to get
their finances under control, new figures released on Time to
Talk Day (Thursday 6 February) show.
A 60-day breathing space period will see enforcement action
from creditors halted and interest frozen for people with
problem debt. During this period, individuals will receive
professional debt advice to find a long-term solution to their
financial difficulties.
As well as this, those receiving mental health crisis treatment
will receive the same protections until their treatment is
complete, in acknowledgement of the clear impact problem debt
can have on wellbeing.
The impact assessment for breathing space, published today,
forecasts that it will help over 700,000 people across the UK
get professional help in its first year, increasing up to 1.2
million a year by the tenth year of operation.
Of this, 25,000 to 50,000 people in mental health crisis
treatment are expected to benefit from breathing space every
year.
The Economic Secretary to the Treasury, , said:
“Being trapped in debt can be an incredibly difficult
experience, and with interest and potential enforcement action
to contend with, it’s no surprise how stressful the impact can
be.
“Today’s figures underline just how critical it is that we roll
out this policy, particularly on a day like today, where we
should all work to reduce the stigma of mental health issues.
“That’s why we will introduce breathing space in early 2021 as
planned, so we can level up the whole country and help millions
of people to rid themselves of problem debt.”
CEO of StepChange Debt Charity, Phil Andrew,
said:
“We know that debt is bad for your mental health, with all the
additional stress and anxiety that it can create. Around two in
five people who turn to us have an additional vulnerability on
top of their debt – and for half of them, that vulnerability is
a mental health problem.
“However, the good news is that after debt advice, many people
report improvements in their wellbeing such as being able to
sleep better at night or cope better with day-to-day life.
“Breathing space will deliver much needed additional help in
two important and connected ways. It will encourage more people
to seek advice, and when they do, there will be better
protections in place to stop further harm and help recovery.”
As well as covering debts like credit cards and loans,
breathing space will cover a wide range of government debts.
Creditors will also benefit from introducing breathing space,
with over £400 million in extra repayments expected in the
first year, as individuals get the support they need to get
their payments back on track.
The announcement builds on previous government work to
alleviate the impact of problem debt, including reforming
regulation around consumer credit, widening access to
professional debt advice and helping build individual financial
resilience.
Notes to editors
