Katie Evans, Head of Research and Policy

Recovery Space in Scotland, Northern Ireland and Wales - everyone should benefit

This afternoon MPs should have an opportunity to debate the Financial Guidance and Claims Bill which, among other things, will enable the government to create a ‘breathing space’ scheme for people in problem debt. The idea is that people struggling to pay back debts – including energy bills, rent and council tax arrears, as well as things like credit cards and loans – should be offered a break from escalating fees, charges and collections activity which keep making the problem worse if they engage with debt advice to find a sustainable solution.

Learning from the Scottish example

The UK government’s commitment to a breathing space scheme comes after years of campaigning from debt advice charities like StepChange. But in Scotland, there’s already a similar official scheme – the Debt Arrangement Scheme. This allows a person who is struggling to repay their debts to find a way forward, without creditors taking them to court.  While working with a money advisor to put together an affordable repayment plan, a person can apply for a six-week pause on enforcement actions on their debts – like charges and calls from creditors.

We know that for many people struggling with problem debt, this respite is a really important circuit-breaker in a cycle of despair, that gives them the hope and strength to see through the complicated process of putting together a budget and working out what they can really afford to pay back. Creating a similar scheme in England, Wales and Northern Ireland would be a real step forward. But we think the scheme would have even greater benefits if it also offered protection from collections activity, charges and fees to people receiving treatment for a mental health crisis.  

Supporting people through a mental health crisis

People experiencing a mental health crisis are also significantly more likely to be in problem debt. And if you’re not in debt when you become unwell, you may well be before you get better, if your illness means that your income drops, you struggle to engage with the benefits system, or you don’t have access to your post or a computer to pay your bills.

That’s why we’re campaigning for the breathing space scheme to be extended to anyone who is receiving NHS treatment for a mental health crisis. In creating a scheme from scratch, the UK government have a real opportunity to make a difference to the lives of people experiencing severe mental health problems, exactly when things are most difficult.

UK-wide problem, UK-wide solution

In research for our Recovery Space report, we heard from people across all four nations of the UK who have either experienced financial difficulties as a result of mental health crisis, supported a friend or family member through them, or who work as a professional caring for people in crisis. Regardless of where people were based, we heard similar stories: of people coming home from hospital to piles of unpaid bills, and in some cases, court summons; of debts and money worries making it much harder for a person to focus on recovery, and in some cases leading to relapse.

We hope that, following the debate, the UK government will do the right thing and commit to extending the breathing space scheme to people receiving NHS treatment for a mental health crisis in England, Wales and Northern Ireland. And we hope that, if successful in the rest of the UK, the Scottish government will amend its own scheme to offer protection to people experiencing a mental health crisis.