Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to mitigate the effect of debt on people's mental health during the covid-19 outbreak.

The government has taken significant steps to support individuals and businesses through this difficult time, including through the Coronavirus Jobs Retention Scheme and the Self-Employment Income Support Scheme.

The government has worked closely with the Financial Conduct Authority to deliver payment holidays to provide temporary support to consumers. To ensure that people have access to the help they need to make effective financial decisions and manage their debt, the government is providing an additional £37.8m for debt advice providers, bringing the Money and Pensions Services’ debt advice budget to over £100m this financial year.

The government recognises that the mental health impacts of Covid-19 are significant. The Prime Minister has announced £4.2m for mental health charities to ensure they can meet increased demand as a result of Covid-19. This builds on the £5m grant announced in March to be allocated to national and local mental health organisations.

The Government is also working to implement Breathing Space, which will give people in problem debt access to a 60-day moratorium on creditor action. People receiving treatment for mental health crisis will be able to access the protections of Breathing Space via a different entry route that mitigates the specific barriers that this group might face in engaging with professional debt advice.

It is important that lenders communicate with their customers about debt, so they can be supported to manage their finances. The government recognises that some of the wording in these letters can cause concern and we are monitoring the issue.