‘Breathing Space’ scheme launched to help those with problem debt

interactive investor comments on HM Treasury's new initiative to help those in crisis debt.

HM Treasury has today launched ‘Breathing Space’ - a new debt respite scheme which will give those facing financial difficulties 60 days to get finances back on track – without debts piling up, worrying letters or enforcement action.

Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Personal finance experiences have been polarised during the pandemic. While many people have become ‘accidental savers’ during the pandemic by keeping jobs while facing fewer outgoings, others have faced greater debts, redundancy or reduced income during furlough.

“While the light at the end of the Covid tunnel shines brightly with the UK poised to lift more Covid-19 restrictions this month, the financial circumstances of those still reeling from the Covid pinch on their income won’t change overnight - so it is only right that further debt support is offered.

“It is important that people continue to pay attention to their financial well-being and take the necessarily action to shore up their financial position. This might mean topping up on your emergency cash fund if you have the means to do so, and/or cutting down on non-essential expenditure.

“A good way to assess your financial position is by doing an emergency budget – looking at how much you’ve spent in the last month and calculating what your outgoings are likely to be for the month ahead. Those struggling financially needn’t suffer in silence. Help is available.”

Key points:

• HM Treasury says around 700,000 people struggling with problem debt to benefit from Breathing Space this year
• The scheme will give those facing financial difficulties 60 days to get finances back on track – without debts piling up, worrying letters or enforcement action
• People will also have access to professional debt advice, with stronger protections for people in mental health crisis treatment