£37.8m boost for debt support services in England to help struggling households

An extra £37.8 million is being made available to debt advice providers this financial year to help people in England who are struggling with their finances because of coronavirus.

The funding will be managed by the Money and Pensions Service (MaPS) and money will go to charities and other money guidance services.

Money will come from a combination of Government funds, reallocated money from the MaPS budget and an industry levy.

The support package will help providers to deliver advice to more people in England who are experiencing financial problems due to Covid-19.

It will also help providers who have seen falls in income to continue their work.

Analysis by MaPS predicts the number of people needing help with debt will climb for at least the next 18 months, peaking at around the end of 2021.

The funding consists of £20.6 million from the Government and £14.2 million raised through a one-off increase to the financial services levy on finance firms.

The MaPS will also contribute £3 million from its existing budget.

Delivery of debt advice is a devolved matter and there will be an extra combined £5.9 million for Scotland, Wales and Northern Ireland, the Government said.

Economic Secretary to the Treasury John Glen said: “We know that some people are struggling with their finances during this difficult time, which is why we want to make sure people can access the help and support they need to manage their debts and get their finances back on track.

“The joint funding package will help debt advice providers to continue with – and increase – their vital work.

“This extra funding comes on top of the unprecedented package we have put in place to support individuals, businesses and the economy through the coronavirus outbreak.”

Minister for pensions and financial inclusion Guy Opperman said: “The Money and Pensions Service was set up to provide free and impartial guidance for those seeking to take control of their finances.

“During these challenging times, that work is even more important, so it’s vital that we provide additional support for those concerned about their financial wellbeing. This funding package will help ensure that people can obtain the quality guidance and help that they need to help manage their money.”

MaPS chief executive Caroline Siarkiewicz said: “The impact the coronavirus pandemic will have on people’s financial wellbeing is significant and will continue for some time.

“We know there will be increased demand for free, expert debt advice services over the coming months and this extra funding will help to ensure that more people can access help more quickly. Our MaPS services are here to provide support for people when they need it and to help them navigate the tricky months ahead.”

The Government said the Job Retention Scheme has helped to protect 8.7 million jobs, with £17.5 billion claimed so far, and the Self-Employed Income Support Scheme has seen 2.5 million claims worth £7.2 billion.

It is also working with the banks and financial regulators to give people payment holidays on their mortgages and a range of consumer credit including credit cards, personal loans, motor finance and payday loans.