MaPS awarded extra £38 million to fund debt advice and other financial support for those affected by the outbreak of coronavirus
09 June 2020
The Money and Pensions Service (MaPS) has secured an additional £37.8 million to enable it to provide debt advice and further financial support for individuals who are suffering financially due to the outbreak of coronavirus.
In a press release, MaPS confirmed that it estimates that the UK’s need for debt help will increase by over 60%, and will peak at the end of 2021, and is advising people to take action sooner rather than later to avoid escalating debt problems in the future.
MaPS has committed to:
- Ensuring one million additional people in England receive debt advice over the course of the next 12-18 months
- Delivering enhanced money guidance to a further two million across the UK. This is in an effort to offer earlier intervention for those affected by the COVID-19 crisis, and to minimise the number of people requiring full debt advice in the future
- Advancing projects to maximise the capacity of existing debt advice to help as many people as possible. One such example is the Pilot of Adviser Capacity and Efficiency
MaPS will manage the funding, and will lay out the process for allocating those funds in the near future.
The MaPS budget prior to the additional fund for debt advice for 2020/21 is £64.6 million, and is drawn from government funds, reallocated MaPS budget and an industry levy. Alongside the Financial Conduct Authority (FCA), MaPS hopes to establish a more sustainable, and fairer debt advice funding approach for the future.
As debt advice is a devolved matter, in addition to the £37.8 million, £5.9 million is also being given to Northern Ireland, Scotland and Wales.
Chief Executive at MaPS, Caroline Siarkiewicz, said:
“This pandemic is first and foremost a health emergency, but for many the longest lasting impact will be a financial one. Experience and evidence tell us that the number of people needing formal debt advice in the wake of a major event like this increases slowly at first but is then likely to grow for many months. When the greatest demand for debt advice hits, potentially in 18 months’ time, we need to be ready and that means acting now.
Debt services are already over-subscribed so we’ll be working hard to help people early, before their financial situation gets too bad. We already have projects under way to help deliver debt advice differently, making better use of data and helping people find the advice that is available more efficiently. For people facing money struggles it’s important they know we are by their side to help them through – not just now, but for the many months to come.”
MaPS already provides steps that those facing financial difficult should take, and advises individuals to:
- Create an emergency budget – to create a full picture of how much income is coming in, and how much is being spent
- Contact creditors if there is a possibility that payments may be missed – Many companies are adapting repayment schedules or making allowances to help people to manage their cash flow, but it is essential to contact them in advance of a missed payment
- Be cautious about borrowing – Those who have emergency savings should use them before considering borrowing, and where possible, borrowing should be from friends and family. This is because high-cost credit can create further financial difficulty
The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.