What the Government must do to help people avoid falling into debt - Richard Lane

Private tenants are massively over-represented amongst those who come to StepChange for help, so we see the sector’s problems play out every day - with the impacts becoming much worse in recent years. This is a direct result of the decline in the availability of affordable housing, combined with the higher cost of living that many households have simply found impossible to absorb without incurring debt problems. With more and more people on less secure incomes privately renting, it’s a sector that’s no longer fit for purpose, so reforming it, along with the commitment to build more homes, is a good start.

We must also address the threat of landlords immediately resorting to eviction when tenants fall behind on their rent. StepChange has proposed a new Tenancy Support Duty, requiring landlords to signpost tenants to free advice, provide time to access support and make reasonable attempts to agree an affordable repayment plan, reflecting some of the best practice we see in the social rented sector and for mortgage providers.

It's also good to see the new Government thinking long term through introducing Bills on employment, energy, and pensions – all of which have a huge influence on the likelihood and extent to which people may end up experiencing problem debt. It’s shocking that many people in work still can’t avoid falling into debt just to pay for the essentials, and that many people who have worked all their lives may find themselves without sufficient pension provision to avoid hardship in retirement. A focus on not just security in work but ensuring workers can make ends meet must be a key focus for this government over the coming years.

The transition to clean, cheap energy has the potential to be of huge benefit to household finances in the long term, as well as reducing the risk of a repeat of the sharp energy price shocks that have tipped so many people into debt recently. But people are also struggling now with unprecedented energy arrears - over £3bn - caused by the energy price shock and continuing high prices. We hope to see the Government and Ofgem work to support those who cannot affordably repay arrears with fair options including write-off where needed and by introducing a new social energy tariff as soon as possible.

These Bills are important and necessary in securing better outcomes for citizens in the future, and we welcome them. Of course, they don’t fully help us solve today’s pressing problems – it will still be necessary for the Government to intervene in tactical, targeted ways to help people cope with living costs and prevent, and ultimately reduce, the likelihood and incidence of problem debt.

Finally, we want to work with the new government on their financial inclusion strategy - to ensure households with low incomes can afford all of life’s expenses without falling in debt, ensuring credit products don’t draw people into financial difficulty and helping people build financial resilience.

Richard Lane is chief client officer at StepChange.