Posted May 31, 2022
Our Director of External Affairs and Partnerships, Jane Tully, takes a look back over some of the key milestones from 2022 so far.
Reflecting on the year so far, it has been a busy time at the Trust with our advisers seeing more and more people, like many across the country, now grappling with the impact of the rising cost of living. Energy bill hikes, rising inflation and wages unable to keep pace are all taking their toll on household budgets, especially when money is already tight. As ever, we’re working to respond quickly to these pressures through our training, resources and insight. Here are three areas we have been focusing on this year so far.
Households under mounting pressure –further challenges ahead
The rising cost of living is rightly high on the agenda for many debt advice charities and organisations. We have already seen the impact that increasing costs are having on the people we help.
Not surprisingly, as energy prices have increased and the price cap has risen, energy arrears are now the most common debt type amongst callers to National Debtline (34%) – with almost one in five Business Debtline callers struggling with their bills.- up from 23% in 2021.
In March we undertook research to understand the impact of the rising cost of living on UK households more broadly and before the energy price cap increase. Based on a poll of more than 2,000 UK adults, our findings were stark.
One in seven UK adults (an estimated 7.9m people) were already behind on at least one household bill, with 6.2 million having gone without essential utilities such as water, energy or electricity in the previous three months due to increased costs.
Worryingly, the research also revealed that one in five people expected to have to borrow money or use credit to cover their essential costs in the next three months. Just one in five said they felt prepared to deal with further rising costs.
With energy prices set to rise even further, and worst-case predictions for inflation at 10% by the time the year is out, even with the latest government support, we are likely to see many more people struggling to keep up with their essentials.
While the support provided to help households so far has been welcome – and has gone further than most expected – this is an evolving situation, and the Government needs to be prepared step in to do more if necessary.
In addition, pausing benefit deductions as a temporary respite measure would help some of the most vulnerable households, now. And with more falling into unmanageable debt, it has never been more important for government, regulators and creditors to work together to ensure people are treated fairly – and given the support they need.Read our full Cost of living briefing, (published before the Chancellor’s latest package of support).
Adapting our training and services
As our clients face these new challenges in the wake of Covid-19, we are adapting our services and training to help. We have a new dedicated factsheet on our National Debtline website for anyone struggling with rising energy bills.
We are also exploring how we can best support debt advisers across the sector, through Wiseradviser, specifically on helping people facing rising costs. Our recent Dealing with the rising cost of living and supporting those in debt webinar had over 400 advisers attend. We are also looking at how our vulnerability and personal resilience courses, through our training and consultancy work, can help creditor staff support people struggling with the cost of living.
Next steps towards independent oversight of bailiff industry
In March, we were pleased to see Catherine Brown announced as the Chair of the new Enforcement Conduct Board, set up to bring independent oversight to the bailiff industry for the first time.
In heading up the board, Catherine will oversee its work to drive up standards across the bailiff industry and protect and improve outcomes for people experiencing problem debt who are dealing with bailiff action.
The Enforcement Conduct Board is the product of years of work from organisations across the debt advice sector, including the Money Advice Trust, and the enforcement industry, as well as national and local Government. Its creation comes at a crucial time, with the financial effect of Covid still being felt and the impact of the cost of living growing. The Board is in its early stages, and we will continue to work to try and ensure it works in the best way for people experiencing bailiff action, which includes the need for statutory underpinning. Find out more about the Board here.
Ongoing work to improve outcomes for people in debt
These are just three takeaways from the year so far – we’ve also continued our work toward improving outcomes for people experiencing problem debt more widely. This includes responding to a number of consultations on topics like the FCA’s upcoming consumer duty, HM Treasury’s Buy Now Pay Later consultation, and providing evidence to the Levelling Up, Housing and Communities Committee’s council tax inquiry.
Added to this, we have recently published a short guide with information on how to report misleading debt advice adverts, as we continue to see paid for adverts online for commercial debt advice that appear misleading, are inaccurate or masquerade as independent debt advice charities.
As ever, you can keep up with all the most recent developments via our latest news page, and read expert opinion from guest authors from the wider debt advice sector and beyond on our Thoughts at the Trust blog site.
Jane Tully is the Trust’s Acting Deputy Chief Executive and has served on the charity’s Senior Leadership Team since 2014. She leads our work on policy, communications, marketing and research. She previously worked for the Charity Finance Group, Charity Commission, NSPCC and local government. View all posts from Jane Tully.