Mental health and debt: supporting the advice sector and creditors

Jane headshotIn Mental Health Awareness Week, Jane Tully, director of external affairs at the Money Advice Trust outlines the work going on to help the advice sector and creditors support people with debt and mental health problems.

We know that mental problems and debt often go hand-in-hand. Findings from the Money and Mental Health Policy Institute suggest that one in four people with mental health problems has problem debt and that often someone’s financial situation makes their mental health worse. They estimate that people with severe mental illness are 2.3 times as likely to experience money or debt problems.

These are just a number of reasons of why we are supporting Mental Health Awareness Week, hosted by the Mental Health Foundation and running all of this week.

At National Debtline and Business Debtline we are all too aware of the impact of debt on people’s mental health and vice-versa. Along with taking out too much credit, job loss and relationship breakdown, mental health problems are one of the most common reasons for being in debt. Nearly one in seven of the people helped by National Debtline say that mental health problems are the reason for their financial difficulty – and we regularly hear from people who tell us how being in debt has affected their mental health.

I had a breakdown due to the stress of not being able to pay my debts and the harassment from the people that I owed money to.
National Debtline caller

And we know the benefits seeking advice can bring

When I phoned to speak to someone I was in despair. I was quickly reassured by your team member that there was a way out and life was worth going on – they made me feel like I mattered.
National Debtline caller

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Ministry of Justice announces new call for evidence on bailiff reform

Taking Control crop blogJane Tully, director of external affairs at the Money Advice Trust, welcomes the government’s announcement of a new call for evidence on the impact of bailiff action on people in debt. The move follows the advice sector’s Taking Control campaign for fundamental bailiff reform.

A little over a year ago, the debt advice sector came together to publish Taking Control: The need for fundamental bailiff reform – a joint report now endorsed by a group of 10 charities on the experiences of our clients since some limited bailiff reforms came into effect in April 2014. Since then we have been working with stakeholders to explore the report’s findings and recommendations.

Monday saw some welcome Bank Holiday news from the Ministry of Justice, with Justice Minister Lucy Frazer announcing a new call for evidence on the impact of bailiff reform, looking specifically at the behaviour of a minority of bailiffs.

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Where next after Wyman?

Jane headshotThe Trust’s director of external affairs Jane Tully reflects on the Wyman Review of debt advice funding.

After an eventful 2017, it is already clear that 2018 will prove to be a truly pivotal year for the future of debt advice.

The Bill creating the new Single Financial Guidance Body (SFGB) is completing its passage through Parliament, the Treasury is forming its plans for breathing space and the Money Advice Service (MAS) are implementing their commissioning strategy.

Added to this, we now have the recommendations from Peter Wyman’s Independent Review of the Funding of Debt Advice to chew over. The review explores the Government’s support offer for people in financial difficulty, covering long-standing questions including ‘who’ should pay for advice and ‘how’ free-to client advice should be funded.

While not everyone might agree with its contents – and it goes far wider than just these two questions – it has certainly given us lots of food for thought. Here’s a quick round up, and some early thoughts…

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Making the Treasury’s breathing space scheme as effective as possible


Director of external affairs Jane Tully blogs on the Trust’s response to the Treasury’s call for evidence on breathing space and statutory debt repayment plans.

This week we turned in our submission to the Treasury’s call for evidence on breathing space – a subject our policy manager Meg van Rooyen has written about on this blog previously, having been closely involved in developing this idea with colleagues in the advice sector over the last few years.

As an idea, breathing space has been a long time coming, and we have been pleased to engage with the Treasury over the last few months as they continue to develop the scheme. Here is a quick tour of some of the main points we have made.

Two schemes, not one

While the two elements that the Treasury are consulting on – breathing space and statutory debt repayment plans – are closely interlinked, it is important that we consider the effectiveness of each in isolation, and that the two elements are not seen as ‘one scheme’.

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10 big things that happened in the world of debt advice in 2017

pexels-photo-273011Jane Tully, the Trust’s director of external affairs, reflects on a busy year for the debt advice sector.

It has been quite some year for those of us working in debt advice – with debt hitting the headlines in a way not seen since the financial crisis, and services under pressure. If you’ve found it hard to keep track (like the rest of us!), here’s a round-up some of the key developments over the past 12 months….

1. Personal debt is back in the news…

Mark Carney started the year by cautioning that the Bank of England would be ‘keeping a close eye on consumer spending’. By July, officials were insisting that banks hold more capital and warning of a ‘spiral of complacency’. Come September lending was positively ‘frothy’(!), with consumer credit noted as a ‘pocket of risk’. A quick glance at the trend-lines and it’s easy to spot the concern – rising inflation, sluggish wage growth despite record low unemployment and soaring consumer credit – now more than £204 billlion – were making people nervous. Then came the first interest rates rise for 10 years. While it wasn’t a surprise, it will have challenged people on tight margins.

2. …and in Westminster…

Meanwhile, over in Westminster, THAT election and the ensuing fallout brought ample opportunity to politicise debt. First, the newly appointed Treasury Select Committee got in on the act by announcing a review into Household Debt. Then the emboldened opposition – spearheaded by John McDonnell – announced a radical policy on capping credit card debts. Along the way there were a few skirmishes in the House of Lords on breathing space – and as if that isn’t enough, there’s a possible National Audit Office (NAO) review and Public Accounts Committee scrutiny – in the offing. The House of Lords Financial Exclusion Committee moved on this important agenda, too, securing a new Financial Inclusion Policy Forum from the government in response. We’ll be watching to see what action flows from this.

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