Debt advice: £10 million of good news for homeowners

16 May 2008

On 9 May, Alistair Darling (Chancellor of the Exchequer) and Caroline Flint (Housing Minister) announced that the Government would provide £10 million of funding to improve the financial support and debt advice that’s available to homeowners having trouble paying their mortgages.

The funding will provide people who might lose their home with ‘expanded access’ to free legal representation in the county courts. It will also pay for specialist debt advice training for staff in charity and local authority organisations, and a new comprehensive debt advice service from the National Homelessness Advice Service.

Looking ahead, they also announced that Treasury and Housing ministers would meet with consumer and debt advice groups so they could look at ways of helping people. The Chancellor himself had already met with all 6 major UK retail banks (Lloyds, Barclays, RBS, HBOS, Abbey and HSBC), who agreed to work with these consumer and debt advice groups to figure out what they could do to meet homeowners’ needs.

The Government wants ‘best practice guidance’ that ensures:

• people on fixed-rate mortgages are warned when their repayments are about to change,
• banks and building societies talk to people who are having short-term difficulties, to see if they can help them out by rescheduling repayments,
• banks and building societies will advise individuals about finding independent debt advice as early as possible, and
• repossession will only be used as a last resort.

Debt advice
The right debt advice can make all the difference. When people get into debt, the sooner they talk to an expert about it, the better. Debt advisers don’t ‘just’ understand the debt solutions available today – they also know how creditors tend to operate (and when they’re likely to compromise on something like repayments), and should be able to provide advice on all kinds of day-to-day matters, from making a budget to arranging direct debits.

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