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Debt Advice Services revamp timing is all wrong

Changes have been made to our Debt Advice Services, but will they really help us through the cost-of-living crisis?

  • The Money and Pensions Service acknowledged that the demand for debt advice services significantly outstripped supply
  • The timing of the changes will likely do little for those struggling with the cost-of-living crisis

As the country ebbs closer to a difficult winter due to the rise in inflation, energy, and fuel prices, The Money and Pensions Service has chosen this moment to press ahead with its overhaul of our Debt Advice Services.

Not that change isn’t needed – it definitely is, but the timing of these changes will do little to help those struggling through the cost-of-living crisis over the next 6 months and potentially beyond.

In October, The Money and Pensions Service, which is an influential function that falls under the Department of Work and Pensions, acknowledged following a lengthy review that the demand for debt advice services significantly outstripped supply, particularly when it came to face to face support. Their goal is to offer more support online or by telephone.

The backdrop to this acknowledgement stemmed from their decision in February to reverse plans to slash face to face regional advice services by around half, which was subsequently followed by their announcement in September that there would be a 26-month extension of grants for these community-based services.

Also in October came the news that MaPs had awarded three new national contracts to provide remote advice via telephone or internet – all of which commence in February 2023.

This has ultimately led to a number of issues that have arguably destabilised the debt advice services offering in this country. The initial threat of cuts to funding caused fears of redundancy and the departure of experienced staff. It has become apparent that funding has fallen well below that of pandemic levels, and this is despite the consistently rising demand for advice and support over the last 12 months.

The providers chosen for funding have also raised eyebrows. Leading debt charity StepChange did not make the cut, whereas the commercial debt management provider Gregory Pennington did. Some of the concern here relates to how effectively Gregory Pennington will balance their MaPs contract with their fee-inducing services.

But ultimately, it’s difficult to feel reassured that the apparent increase in capacity across debt advice services is genuine, particularly as the number of people that need to draw on these services climbs to unprecedented levels and shows no signs of slowing down.

Written by Neil Coleman is an independent platform and information service that aims to provide you with the tools you need to make smarter financial decisions. While we are independent, the offers that appear on this site are provided by companies from which receives compensation, though we never advertise or promote services or companies that we do not ethically support.

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