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<p>The Government is committed to monitoring and understanding personal debt levels
in the UK, including the impact of cost-of-living pressures, and help individuals
access appropriate guidance and support if they need help to get their finances back
on track. Different organisations measure and define ‘problem debt’ in different ways.
The Government monitors personal debt levels by working closely with the Money and
Pensions Service (MaPS) , the Financial Conduct Authority and by engaging regularly
with many other stakeholders on their research and findings.</p><p> </p><p>MaPS undertakes
an annual survey of Debt Need to understand how many people are facing financial difficulties
and to better understand their characteristics, needs and preferences. The most recent
survey indicated that 16% (around 8.5 million) of the UK adult population needed debt
advice, with a further 20% (around 10.6 million) ‘at risk’ and likely to need help
if their situation deteriorates.</p><p> </p><p>To help people in problem debt, the
Government continues to maintain record levels of funding for free-to-consumer debt
advice in England in 2022-23, bringing this year’s debt advice budget for MaPS to
over £90 million.</p><p> </p><p>In addition to this, the Government launched the Breathing
Space scheme in England and Wales last year. The scheme gives eligible people in problem
debt who receive professional debt advice access to a 60-day period in which enforcement
action is paused and most fees, charges and interest are frozen. Mental Health Crisis
Breathing Space is an additional strand of Breathing Space that enables people receiving
mental health crisis treatment to access the protections of the scheme for the full
duration of their treatment, plus a further 30 days. In 2021, MaPS set up a single
point of entry for the service and commissioned a dedicated pilot, delivered by Rethink
Mental Illness.</p><p> </p><p>The Government also continues to develop the Statutory
Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem
debt to combine their debts into a single repayment plan, with payments made over
a manageable time period, while receiving legal protections from creditor action for
the duration of their plan.</p><p> </p><p>To help people access debt advice, MaPS
launched MoneyHelper in 2021, a consumer-facing service which provides free and impartial
guidance for people across the UK. This includes budget planning and bill prioritiser
tools, practical tips for engaging with creditors and a Debt Advice Locator Tool,
which helps people find free, high-quality debt advice in their local area or via
telephone and online.</p><p> </p><p>MaPS has also developed the Money Advisor Network
pilot which enables a range of organisations including Job Centre Plus, local authorities
and financial service providers to refer people for free to MaPS funded debt advice.
The individuals referred can either proceed immediately to debt advice, request a
call-back at a more convenient time or schedule an in-person appointment.</p>
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