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Third party deductions

Download our briefing

The problems of third party deductions

Our new briefing looks at how third party deductions (TPD) can make it difficult for families to pay for essentials, force them to turn to further credit to keep on top of bills, and cause hardship.

When making a deduction decision, the Department for Work and Pensions guidance says it will consider if a deduction is in the interests of the family. Despite this, our client survey makes it apparent that deductions do often cause harm.

What impact do third party deductions have?

Just over a quarter of our clients report they’ve had money deducted from benefits to go towards arrears. Our research also found:

  • Over a quarter of those currently having money deducted have two deductions in place
  • Almost 1 in 10 have three simultaneous deductions in place
  • Clients in a vulnerable position are more likely to report they've had money deducted from their benefits

71% of clients with deductions from their benefits say it's caused them and their family hardship

What needs to be done about third party deductions?

  • They should only be used when they’re affordable and helpful to the consumer, allowing them to keep up with essential bills
  • A new minimum deduction of £1 should be introduced
  • New rules should be written on the treatment of vulnerable people
  • Firms, guided by regulators, should move away from using deduction rates as a benchmark for debt collection

Download the paper now for the full picture. 

Download now

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They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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