"When the greatest demand for debt advice hits, potentially in 18 months’ time, we need to be ready and that means acting now."
The guidance body launched last year and brings together the services previously delivered by the Money Advice Service, the Pensions Advisory Service and Pension Wise.
Early analysis by MaPS predicts the number of people needing help with debt will climb for at least the next 18 months – increasing by over 60% and peaking around the end of 2021.
MaPS says the funding will ensure 1 million additional people in England get debt advice over the next 12-18 months. It also aims to deliver enhanced money guidance for a further 2 million across the UK, to offer an earlier intervention for people affected by the coronavirus outbreak and to reduce the number who go on to need full debt advice.
The extra money is in addition to the existing MaPS budget for debt advice in 2020/21 of £64.6 million and will come from a combination of government funds, reallocated MaPS budget and an industry levy. MaPS is also working with the FCA to establish a fairer and more sustainable debt advice funding approach for the future.
In addition to the £37.8 million being announced by HM Treasury today, £5.9 million is also being allocated to Northern Ireland, Scotland and Wales as debt advice is a devolved matter.
Caroline Siarkiewicz, chief executive at the Money and Pensions Service, 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.”
