09 Sep 2020 | Posted In Money advice news

The Money and Pensions Service (MaPS) has allocated the first tranche of an additional £37.8 million to fund extra debt advice and other money support for people affected by Covid-19.

Up to £7.5 million is being allocated to three debt advice providers – Christians Against Poverty (CAP), PayPlan and StepChange – to cover lost income from a key voluntary funding stream known as ‘Fair Share’. The scheme links directly to how much debt customers repay and has seen a significant reduction since the pandemic took hold.

StepChange is an existing partner of MaPS but this is the first time the organisation has provided funding to CAP and PayPlan.

A separate funding stream has been established to employ hundreds of extra debt advisers ahead of the expected increase in need for debt advice. An initial market engagement exercise by MaPS has indicated the sector can rapidly increase capacity by recruiting 500 additional advisers who will be trained from this autumn.

Organisations interested in bidding to secure new debt advisers using MaPS funding will need to be able to offer a service across all of England via at least two channels.

Caroline Siarkiewicz, chief executive at MaPS, said:

“The toll of coronavirus on some people’s financial wellbeing will be severe and long lasting. Although many have been helped by the furlough scheme and special flexibility on products such as mortgages and loans, there are likely to be challenges ahead when these come to an end. We are taking steps now to ensure the support needed by people dealing with money problems will be available at the crucial time, whether that’s right now or in the months to come.

“In the wake of coronavirus, our first priority has been to maintain capacity in existing debt services and it’s great news we’ve been able to agree a funding package to support three major operators to maintain much of their pre-pandemic service levels. We know Fair Share is only one funding source and we stand ready to react to other challenges debt advice providers might face as a direct result of the pandemic. Over the coming months we will also be working to increase the availability of debt advice services by supporting the sector to train up hundreds more debt advisers. Meanwhile, people struggling with their money should be reassured there is support available right now, and the earlier they seek help for their problems, the easier they often are to tackle.”

Phil Andrew, CEO of StepChange Debt Charity, added:

“While we know most people want to repay their debt, the sad truth is that in the wake of the pandemic fewer are currently able to. Hopefully this will prove to be a temporary problem for many. As yet, though, huge numbers have little certainty about what their financial future will look like. For us, knowing that we will be able to afford to help as many people as possible, whatever kind of debt solution they need, is hugely reassuring.

“At a time when we are less able than usual to rely on predictable levels of our normal funding, this support will enable us to help many people through this difficult period. Now would not be the time for reputable debt advice services to have to contract – if anything, we need to demonstrate even more energy and creativity to help solve the nation’s household debt problems created by Covid-19.”

The extra £37.8 million funding for England was announced by HM Treasury in June to respond to an expected 60% increase in demand for debt advice over the next 18 months as a result of the coronavirus outbreak.

MaPS has committed to ensuring one million additional people in England get debt advice over the next 12 to 18 months while enhanced money guidance is due to be available to a further two million as an early intervention measure.

Article credit: bestadvice.co.uk