A debt relief "breathing space" scheme was announced in late 2020 and it will come into force from May 4. The scheme will provide support and protections to those who have various debts.
“If you have unmanageable debts, the new scheme could give you the time to get the advice that will help, and to start taking action.
“Breathing Space isn’t a temporary fix to simply keep your creditors at arm’s length.
"You’ll need to work with your debt adviser to try and make a plan to deal with your debts.
“For anyone who feels they can’t manage their debt, the most important thing is to seek help as soon as possible from a free and impartial debt advice charity like Citizens Advice.”
“Your debt adviser will work with you to find the best way forward. That might involve applying for breathing space to buy some time while you choose the right debt solution to fit your circumstances.”
This new scheme is likely to be needed by many as according to research conducted by the Money Advice Trust in late March, as many as 6.2 million adults have had to use credit to pay for essential costs such as groceries, utility bills and council tax as a result of the pandemic.
The same research detailed families across the UK are worried about how their finances will cope once Government support measures end and Joanna Elson, the chief executive of the Money Advice Trust, commented on this: "A year on from when the Covid-19 outbreak began, the finances of millions of households have been turned upside down, with the effects not felt equally. While some people have found themselves able to save more, others have fallen into financial difficulty – with many struggling to cover food and energy costs.
“It is clear that this is not just a health crisis but a financial one, too. Our findings suggest more than 10 million people are worried their finances will not recover, with more than 5 million already behind on bills – and this is only likely to increase. Without coordinated action now to help people get back on a stable financial footing, there is a danger of problem debt becoming one of the pandemic’s many lasting legacies.
“Support measures put in place by government, regulators and creditors have undoubtedly helped ease the financial pressures on many households, however, without a clear roadmap out of debt, for millions of people these challenges are set to continue long after lockdown measures ease.”
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