People who accessed Breathing Space through StepChange in its first year of operation were more likely to complete advice, enter a debt solution, and achieve more positive wellbeing outcomes than other clients, says a new evaluation.
Clients taking advantage of Breathing Space in its first year have experienced markedly improved outcomes compared to those who did not, according to a new survey of StepChange Debt Charity clients. The charity found that clients who took Breathing Space were over three times more likely to go through full debt advice and enter into a debt solution than those who did not use the scheme.
StepChange surveyed around 550 clients following the completion of the first year of the Breathing Space scheme, two thirds of whom had taken it up. The scheme gives eligible clients in England and Wales a 60-day break from further interest, fees, and new enforcement action, and is only available to people seeking help from an appropriate debt advice provider.
Importantly, clients taking up Breathing Space benefited from valuable protections they otherwise wouldn’t have had access to, such as breaks in interest, fees and charges. Before accessing Breathing Space, fewer than one in five StepChange clients received these protections from all their creditors after contacting them to say they were struggling. This re-affirms the need for statutory protections that ensure consistent forbearance from creditors and provide an incentive for people to access debt advice earlier.
Breathing Space clients also had better wellbeing outcomes after debt advice, with two thirds or more reporting improved wellbeing, including sleeping better and worrying less about debts, compared with 1 in 2 among those who did not access the scheme.
Despite the largely positive reception to the scheme from those who have used it, issues still remain. With one in four clients saying a debt solution was not in place by the time their 60-day period had expired, and two in five saying 60 days wasn’t long enough for their situation to stabilise and to make progress with their debts, it’s clear there is a need to understand impacts across the sector and consider recommendations for improvements to the scheme. StepChange will be continuing its evaluation of Breathing Space by engaging with more clients as well as creditors, providers and debt advisers in order to do this.
Commenting on the findings, Richard Lane, StepChange director of external affairs, said:
“Our initial findings clearly show the positive impact that Breathing Space has had on financially vulnerable people, with clients who took up the scheme over three times more likely to go on to a debt solution than those who did not enter Breathing Space.
“The research also shows clients’ wellbeing improving significantly thanks to the protections offered Breathing Space, although 60 days is not always long enough for people to have completed the necessary preparation to enter into a sustainable debt solution, and there would be benefits to creating a mechanism to bridge the gap. Breathing Space has succeeded overall in helping to improve outcomes for people who have used it so far, even though the scheme has not always been easy to administer, particularly early on, and there are certainly lessons to learn as the Government prepares for implementation of the Statutory Debt Repayment Plan scheme.”