Asked by: Charlotte Nichols (Labour - Warrington North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department plans to improve access to free debt advice; and if she will make a statement.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government is committed to ensuring that people in financial difficulty have access to free, impartial debt advice. Through the Money and Pensions Service (MaPS), the Government funds a range of national and community-based services to support individuals and families across England. The Government also provides funding for debt advice services in Scotland, Wales and Northern Ireland, which are delivered by the devolved governments.
Funding levels for both MaPS and the devolved governments are regularly reviewed to reflect demand, inflation, and evolving needs.
MaPS’ latest impact report shows that people accessing the debt advice services it funded in 2023/24 gained an estimated £48 million in additional income, demonstrating the value of these services in supporting financial resilience. MaPS is continuing to expand access to its services by strengthening its digital capabilities and working in partnership with local organisations, to ensure support is available to those most in need.
In addition, the Government is currently developing a Financial Inclusion Strategy which aims to improve access to financial services and support, including debt advice. The strategy will be published later this year.
Asked by: Lord Bishop of St Albans (Bishops - Bishops)
Question to the HM Treasury:
To ask His Majesty's Government, following the publication of polling data on 11 April by Christians Against Poverty, In-person debt advice, what steps they are taking to expand access to and fund free debt advice services authorised by the Financial Conduct Authority.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government regularly engages with the Bank of England, the Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) to monitor personal finances and debt levels. The Money and Pensions Service conducts an annual survey of people in financial difficulty. The results of their latest survey were published on 29 February 2024.
To support those in debt to manage their finances, the Government funds national and community-based debt advice services, through the Money and Pensions Service, for hundreds of thousands of individuals and families in need across England. The Government also provides funding for debt advice in Scotland, Wales, and Northern Ireland. As debt advice is a devolved matter, responsibility for delivering these services rests with those devolved governments.
Funding levels for both the Money and Pensions Service and the devolved governments are regularly reviewed to reflect demand, inflation, and evolving needs.
Asked by: Mike Amesbury (Independent - Runcorn and Helsby)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the adequacy of Government support for debt advisory services.
Answered by Emma Reynolds - Secretary of State for Environment, Food and Rural Affairs
The Government currently provides national and community-based debt advice services, through the Money and Pensions Service, to hundreds of thousands of individuals and families in need across England. The Government also provides funding for debt advice in Scotland, Wales, and Northern Ireland. As debt advice is a devolved matter, responsibility for delivering these services rests with those devolved governments.
Funding levels for both the Money and Pensions Service and the devolved governments are regularly reviewed to reflect demand, inflation, and evolving needs.
Asked by: Lord Bishop of St Albans (Bishops - Bishops)
Question to the Department for Work and Pensions:
To ask His Majesty's Government, further to the Christians Against Poverty briefing paper Deficit budgets: The cost to stay alive, published in September, what steps they are taking to increase access to financial advice and debt management services for those experiencing deficit budgets.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
We are committed to tackling poverty and good work will be the foundation of our approach.
We know that good work can significantly reduce the chances of people falling into poverty, but too many people are being denied the security and dignity that comes with being in good work. The Get Britain Working White Paper, to be set out in the Autumn, will develop measures to reduce inactivity and help people to find better paid and more secure jobs.
Tackling child poverty is at the heart of this Government’s mission to break down barriers to opportunity. The Child Poverty Taskforce has started urgent work to publish the Child Poverty Strategy in Spring 2025 and will explore all available levers to drive forward short and long-term actions across government to reduce child poverty. This will include listening to the voices of children living in poverty and their families.
We need a modern and effective social security system that is fit for purpose which is why we have committed to reviewing Universal Credit and listening to the full range of views on potential changes.
For those most in need, we have extended the Household Support Fund (HSF) for a further 6 months, from 1 October 2024 until 31 March 2025. An additional £421 million will be provided to enable the extension of the HSF in England, plus funding for the Devolved Governments through the Barnett formula to be spent at their discretion, as usual. As has been done for previous schemes, the Fund is available to County Councils and Unitary Authorities in England to provide discretionary support to those most in need with the cost of essentials.
The Money and Pensions Service, an arm’s-length body sponsored by DWP, supports those most in need to improve their financial wellbeing. Working collaboratively across the UK, it aims to ensure that customers can access high-quality money advice guidance and debt advice how and when they need it through its free MoneyHelper service.
Asked by: Emma Hardy (Labour - Kingston upon Hull West and Haltemprice)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how much funding his Department has provided to the Money and Pensions Advice Service for debt advice services in the (a) 2022-23 and (b) 2023-24 financial year; and what estimate he has made of the level of demand for these services in the same period.
Answered by Laura Trott - Shadow Secretary of State for Education
The Money and Pensions Service’s (MaPS) 2022-23 debt advice budget was £91.4m, with the majority of those funds allocated to free-to-client frontline debt advice delivery in England. MaPS’ 2023-24 debt advice budget will be communicated through the Financial Conduct Authority’s consultation, due to be published in April.
Asked by: Emma Hardy (Labour - Kingston upon Hull West and Haltemprice)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what criteria the Money and Pensions Service plans to apply to new contracts on debt advice to assess the outcomes of individual advice sessions; how those outcomes will be recorded; and whether it plans to use that information to inform future decision-making.
Answered by Laura Trott - Shadow Secretary of State for Education
The Money and Pensions Service’s Debt Advice Evaluation Research (Voice of the Customer) programme tracks the experiences of customers using its debt services from beginning to end via an outcomes survey. Participation is mandatory for suppliers and output forms overall performance monitoring and management. Insight gathered will support the evidence base for future debt advice commissioning.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to promote debt (1) advice, and (2) management, services across public services.
Answered by Baroness Penn
The Government recognises the vital role that debt advice and management services play in helping people in financial difficulty and vulnerable circumstances.
The Government Debt Management Function (GDMF) works closely with the debt advice sector through the Fairness Group to improve the way vulnerable debtors are identified and supported. This includes through improved signposting / referrals to the advice sector.
The GDMF has published the Debt Functional Standard, Vulnerability Toolkit and Economic Abuse Toolkit. These set expectations for government organisations to, where appropriate, signpost to external support services and debt advice.
To help people access debt advice, the Money and Pensions Service (MaPS) launched MoneyHelper in 2021, a consumer-facing service which provides free online guidance for people dealing with money worries and debt and connects people to free advice through its debt advice locator tool.
This year, MoneyHelper undertook a cost-of-living promotional campaign to increase awareness of its content for those struggling with rising cost of living pressures, including tools to support people with prioritising bills, talking to creditors and budget planning. As of the end of March, the campaign had generated around 85,000 additional online sessions.
MaPS also promotes the Money Adviser Network (MAN), a free partnership opportunity for organisations having conversations with people in financial difficulty. The MAN seeks to simplify how people access regulated debt advice, providing a single point of entry to a panel of free, high quality debt advice agencies. It now comprises more than 500 referral partners including DWP’s Debt Management and Universal Credit Service Centre, HMRC, Crown Commercial Services and the Child Maintenance Service.
MaPS also engages with the GDMF’s Fairness Group, supporting improvements to the government’s debt management practices including promoting the use of the Standard Financial Statement (SFS).
Asked by: Emma Hardy (Labour - Kingston upon Hull West and Haltemprice)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of the budget allocation for the Money and Pensions Service for community-based debt advice in the period between 2023 and 2025 on the number of compulsory redundancies of advisors; and whether he has had recent discussions with (a) the Citizen's Advice Bureau and (b) other providers on this issue.
Answered by Andrew Griffith - Shadow Secretary of State for Business and Trade
The Money and Pensions Service (MaPS) recently extended grants for community-based debt advice for 26 months starting from 1 February, as part of a £76 million total package for debt advice services in England this year. The package includes three-year contracts to provide national and business debt advice and administration of debt relief orders and is expected to increase the volume of debt advice sessions.
As part of the transition phase of implementing the new grant arrangements and contracts, MaPS are in regular discussions with their funded providers, which includes discussions about resourcing arrangements. The Government continues to work closely with MaPS to monitor the transition to these new arrangements.
Asked by: Baroness Bennett of Manor Castle (Green Party - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to ensure that public advice services for (1) individuals, and (2) households, struggling with debt are able to meet demand.
Answered by Baroness Penn
The Government recognises the vital role that advice services play in helping people in problem debt and vulnerable circumstances.
To help people in problem debt, the Government continues to maintain record levels of funding for free-to-client debt advice in England, bringing the 2022-23 debt advice budget for the Money and Pensions Service (MaPS) to over £90 million.
MaPS is the single largest funder of debt advice in England. It works alongside partners across the UK to make debt advice easier and quicker to access, and to improve standards and quality across the sector.
MaPS recently concluded a debt advice commissioning exercise with the primary aim of increasing the volume of debt advice available, as well as ensuring that such advice meets clients’ needs and proactively targets vulnerable and underrepresented groups. These contracts, once signed, will be starting from 1 February 2023.
To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via the telephone and online.
MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.
Asked by: Lord Bishop of Durham (Bishops - Bishops)
Question to the HM Treasury:
To ask Her Majesty's Government what steps the Money and Pensions Service is taking to help those in need of debt advice know where to seek it.
Answered by Baroness Penn
The Government is committed to monitoring and understanding personal debt levels in the UK, including the impact of cost-of-living pressures, and help individuals access appropriate guidance and support if they need help to get their finances back on track. Different organisations measure and define ‘problem debt’ in different ways. The Government monitors personal debt levels by working closely with the Money and Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly with many other stakeholders on their research and findings.
MaPS undertakes an annual survey of Debt Need to understand how many people are facing financial difficulties and to better understand their characteristics, needs and preferences. The most recent survey indicated that 16% (around 8.5 million) of the UK adult population needed debt advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help if their situation deteriorates.
To help people in problem debt, the Government continues to maintain record levels of funding for free-to-consumer debt advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to over £90 million.
In addition to this, the Government launched the Breathing Space scheme in England and Wales last year. The scheme gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which enforcement action is paused and most fees, charges and interest are frozen. Mental Health Crisis Breathing Space is an additional strand of Breathing Space that enables people receiving mental health crisis treatment to access the protections of the scheme for the full duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single point of entry for the service and commissioned a dedicated pilot, delivered by Rethink Mental Illness.
The Government also continues to develop the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to combine their debts into a single repayment plan, with payments made over a manageable time period, while receiving legal protections from creditor action for the duration of their plan.
To help people access debt advice, MaPS launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial guidance for people across the UK. This includes budget planning and bill prioritiser tools, practical tips for engaging with creditors and a Debt Advice Locator Tool, which helps people find free, high-quality debt advice in their local area or via telephone and online.
MaPS has also developed the Money Advisor Network pilot which enables a range of organisations including Job Centre Plus, local authorities and financial service providers to refer people for free to MaPS funded debt advice. The individuals referred can either proceed immediately to debt advice, request a call-back at a more convenient time or schedule an in-person appointment.