The Government has introduced a 60 day “breathing space” for people with debt, allowing them the time and support needed to rid themselves of problem debt.
Breathing space will freeze interest, fees and enforcement while individuals will receive professional debt advice to find long-term solutions to their financial difficulties. This will be especially beneficial to those in treatment for mental health crises, who will continue to receive breathing space protections until their treatment is complete.
The Treasury estimates that this policy will help over 700,000 people a year, including 25,000 people in mental health crisis treatment.
Pendle MP Andrew Stephenson welcomed the move.
He said: "More must be done to help prevent people entering problem debt and providing help for those who do. That’s why introducing a breathing space period is so important.
“Alongside the introduction of financial literacy education in schools from next year, which I campaigned for, we can better ensure people get the help they need to make informed decisions to regain their financial stability.”
Chief executive of StepChange Debt Charity Phil Andrew said: “We know that debt is bad for your mental health, with all the additional stress and anxiety that it can create. Around two in five people who turn to us have an additional vulnerability on top of their debt – and for half of them, that vulnerability is a mental health problem.
“Breathing space will deliver much needed additional help in two important and connected ways. It will encourage more people to seek advice, and when they do, there will be better protections in place to stop further harm and help recovery.”
Craig Simmons, Head of Debt Policy and Strategy at the Money and Pensions Service, said: “This policy is one of many landscape shifting initiatives we expect to see as part of the UK Strategy for Financial Wellbeing, and we continue to trial, deliver and promote other interventions which can make a real difference to people’s lives.”