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We welcome the launch of Breathing Space

27 April, 2021

  • New Government scheme will give eligible clients in England and Wales a 60-day break from further interest, fees, and new enforcement action
  • The scheme could benefit up to 700,000 people per year and is designed to make it easier for someone struggling financially to seek a debt solution without pressure from creditors
  • Find our more about the full eligibility criteria and information on how Breathing Space is administered

From 4 May 2021 people in England and Wales seeking debt advice may be entitled to a 60-day pause on interest, fees and new enforcement action under the Government’s new Breathing Space scheme.

We have been at the forefront of campaigning for Breathing Space since 2014. Our previous research has shown that six in ten clients who weren’t protected from interest, charges and new enforcement action went on to take out even more credit to cope.

The scheme will for the first time grant statutory protection to people from these actions, giving them time to work through their debt options with an advisor, reducing both their worry and their costs, and allowing them to focus on planning a realistic route out of debt.

Last year, the Treasury estimated the new scheme could benefit up to 700,000 people in its first year, rising to more than a million people within a decade.

Given the number of people in problem debt has risen from 1.7 to 2.4 million over the course of the pandemic, it’s possible even more people could take advantage of Breathing Space.

The Breathing Space Scheme is the first piece in the jigsaw of protections for people in problem debt that we have campaigned for. It will be followed in the coming years by the introduction of Statutory Debt Repayment Plans, which will give people coming out of Breathing Space the chance to affordably pay off their debts while remaining exempt from further interest, charges and enforcement action.

We will continue to work with the Treasury as it progresses plans for this additional guarantee of protection, which will give people further space to recover from serious debt problems.

StepChange CEO Phil Andrew, said:

“This landmark piece of legislation has real potential help put people seeking debt advice on the road to recovery.

"It’s hugely welcome that people taking action to deal with their debts will finally get the statutory protection that, to date, has only been voluntary and offered by some, but not all, of people’s creditors.

“StepChange has led the campaign for the implementation of Breathing Space since 2014. During this time, we’ve listened to our clients, researched, campaigned, and consulted with the government and now we can finally see some of our recommendations made into law and available to those who really need it.

“As ever, our advice to anyone struggling with debt is to seek help as soon as possible. Breathing Space will help to reduce the pressure of a stressful debt situation, allowing people to focus on engaging fully with advice. This is the first step towards regaining control of your finances and plotting a sustainable route out of debt.”

Notes to Editors

  1. A formal statutory moratorium already exists in Scotland, giving protection similar to Breathing Space
  2. Breathing Space Timeline:
    • 2014: StepChange begins campaigning for Breathing Space
    • 2015: StepChange publishes research and key findings about why people struggling in debt need extra protection from creditors
    • 2017: StepChange secures manifesto commitments on Breathing Space from two main political parties
    • 2017: Government launches a consultation on a Breathing Space scheme
    • 2018: Government ministers visit StepChange to talk about debt, pensions, and Breathing Space
    • 2018: Primary legislation for Debt Respite Scheme (Breathing Space) passed
    • 2019: Government announces it will introduce a 60-day Breathing Space period in 2021
    • 2019: StepChange responds to the Treasury’s consultation on the design of the schemes
    • 2019: StepChange works closely with the Treasury to ensure Breathing Space will work well for clients and debt advice agencies
    • 2020: Government publishes draft Breathing Space regulations
    • 2021: Breathing Space launches 4 May in England and Wales
    • 2021: Legislation paving the way for the Statutory Debt Repayment Plan

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