If you’re covering the first usage data to be published on the recently introduced Debt Respite Scheme — which reveals 63,864 people took advantage of the service in its first year — the following comments from James Andrews, personal finance expert at Money.co.uk, may be of interest. The ‘breathing spaces’ available under the scheme can freeze interest and pause enforcement action:
“Problem debt is reaching epidemic proportions in Britain. Already tens of thousands of people have been pushed into using breathing spaces to stop interest wracking up while they try to dig themselves out. That’s enough to fill a city the size of Canterbury.
“It will only get worse this year. Bank of England data showed that by last September almost one household in ten was describing their loan and interest repayments as a heavy financial burden, up a third in a year. And that was before gas, electricity, petrol, diesel and food all started rocketing in price and the Bank started raising interest rates.
“The problem varies enormously depending on where you are. Ten times as many people in Runcorn and the surrounding areas have made use of the scheme than in London’s Camden, with a North-South divide clearly in play.
“The way breathing spaces have been used so unevenly should give politicians on all sides pause for thought on what levelling up really means. Some households are clearly experiencing the misery of acute financial stress and those in the South aren’t suffering nearly as much as those in the North.
“But people asking for a break in their payments have done the right thing by seeking out some of the free debt advice available. It’s vital that if you’re experiencing financial difficulty you don’t stick your head in the sand. Help is out there and debt charities can guide you through the practical steps you can take to give yourself the best chance of getting on top of it.”
James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments - picking up a series of awards for his journalism along the way.