The Debt Respite Scheme aims to give people a period of time (known as 'Breathing Space') to engage with a debt adviser to sort out their money worries during which they will not be asked for payment or incur extra costs on qualifying debts.

These new laws build upon the support that the financial services industry already provides, but also extends protection for individuals to debts that they owe to other creditors such as household bills and rent. This will be welcome additional support for customers whose finances might be impacted as a result of the pandemic.

In the current environment it is as important as ever that customers who are worried about their finances contact a debt adviser to get the help they need. Breathing Space can only be accessed through debt advice providers - a list of free providers can be found at www.moneyadviceservice.org.uk/en/tools/debt-advice-locator. 

A debt adviser will assess the eligibility of customers based on whether the customer is unable or unlikely to be able to repay their debts and will determine whether Breathing Space is appropriate. If so, customers will then get up to 60 days Breathing Space to continue working with their debt adviser to identify the most appropriate debt solution. During the Breathing Space period no collections activity will take place on qualifying debts, and customers will never be required to pay interest and fees that may arise on these debts. In this way the level of debt does not increase.

Breathing Space is a different form of customer support to the recent Covid-19 payment deferrals that lenders provided. Breathing Space is not a payment deferral, and if customers are able to pay some of their debts and bills it is in their best interests to do so to reduce the level of debt. Additionally, whilst they might not be asked for payment on qualifying debts during the Breathing Space, any missed payments will continue to be reported on their credit file. The debt adviser will help to explain any obligations the customer has, which could be different for secured debts or essential household bills (such as mortgage payments, utility bills or council tax) and unsecured debts.

Customers are encouraged to provide full details of all their debts to their debt adviser as it will help the Breathing Space protections to be applied efficiently and for customers to receive optimal benefit. Advisers will provide details of the qualifying debts that are to be protected to a confidential central government register which will then notify the creditor.

These new protections are enhanced for customers who are receiving mental health crisis treatment. They will continue for as long as an approved mental health professional confirms crisis care is continuing.

UK Finance has worked with our members and a wide range of representatives who provide independent debt advice to produce a set of frequently asked questions which give more detail around these protections and in particular how they apply to debts with financial services providers.

Debt Respite Scheme FAQs

Customer Experience Summit, 7-11 June

Join us for the UK Finance Customer Experience Summit, a new free event where UK Finance members and industry stakeholders will discuss the path to economic recovery and the opportunities to do so in ways that benefit customers and meet their changing needs. Across the week, sessions will include:

• Keynote Panel: Strategic Priorities
• Access to Financial Services
• Open Banking & Open Finance
• Protecting Vulnerable Customers
• Financial Difficulty Through The Pandemic
• Building a Culture Where The Right Behaviours Thrive at Every Level
• Improving The Home-Buying Experience For Customers
• Covid & The Changing Psychology of the Customer Experience
• Human-Centred Product Design
• Data-Driven Decision Making
• Becoming Your Customer's Preferred Provider
• Payments: Improving Consumer Protections

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