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05/07/2017

New Single Financial Guidance Body a positive step forward for debt and money advice – R3

The creation of a Single Financial Guidance Body could help break down barriers stopping indebted individuals from receiving free and impartial advice, says insolvency trade body R3 ahead of a key parliamentary debate on the issue.

Today (5th July), Lords will debate the Government’s Financial Guidance and Claims Bill, which could lead to the creation of a new financial advice body for consumers. This body is intended to replace existing government agencies, including the Money Advice Service, Pensions Advisory Service and Pension Wise.

Adrian Hyde, President of R3 says: “The creation of a single body for financial guidance is a great opportunity to tackle issues with debt and personal finance in the UK. A one-stop-shop for free, impartial advice will help remove some of the artificial barriers that get in the way of people dealing with problem debt.

“There are some key objectives the new body needs to work towards. It needs to work closely with existing debt experts in the private and charity sector, including R3, to understand an indebted individual’s ‘debt journey’ and it should help shed light on the barriers people face when dealing with debt – including the stigma associated with debt and insolvency.

The new body is also expected to play a critical part in improving financial education.

Adrian adds: “Education on personal finance is an often-overlooked area that could benefit from the new body. Recent research from R3 found that just one in ten (10%) British adults say they have received useful advice about personal finance through their school or university. By sign-posting to appropriate debt advice options and offering one-to-one guidance, the new body can make significant headway towards much-needed improvements on financial education.”

‘Breathing Space’ needed

The new Single Financial Guidance Body should be introduced alongside a 28-day ‘Breathing Space’ period for indebted individuals, says R3. A Breathing Space should allow indebted individuals to make decisions about dealing with their debts free from creditor action and with debt repayments, interest, and charges frozen.

Despite plans for a ‘Breathing Space’-style procedure being included in the Conservative and Labour general election manifestos, Breathing Space plans were not included in last month’s Queen’s Speech.

Adrian Hyde comments: “It was disappointing to see the government omit a ‘Breathing Space’ scheme from the Bill.

“It’s vitally important that indebted individuals end up in a debt solution appropriate to their situation. This doesn’t always happen, and the difficulty of being able to get professional, independent advice in a relatively unpressured environment is a factor.

“A short ‘Breathing Space’ would give people in debt the chance to seek advice and deal with their debts effectively.

Adrian adds: “Combining the introduction of a new advice body with the introduction of a ‘Breathing Space’ would give those in financial difficulties a significantly better chance of turning their situation around”.

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.