A Blackpool MP has backed calls for a new scheme to help thousands of families regain control of their finances as data from the Bank of England shows unsecured household debt rising at its fastest rate since the financial crisis.
Paul Maynard, MP for Blackpool North and Cleveleys, has joined calls in Parliament to introduce a ‘Breathing Space’ scheme that would offer people seeking debt advice a 12-month legal protection from mounting interest, charges and enforcement action.
He said: “It can’t be right that children’s mental health and happiness is suffering as a result of creditors unfairly escalating people’s debt problems.
“Families in problem debt need time and space to get back on their feet.
“By providing a period free from additional interest, charges and enforcement action, a new Breathing Space scheme would help families recover their financial situation and put in place a plan to affordably repay their debts.
“I’m pleased that the Breathing Space proposal has widespread cross-party support, including from the Work and Pensions Select Committee and the APPG (All Party Parliamentary Group) on Debt and Personal Finance.
“The Government now needs to act by putting a comprehensive Breathing Space scheme in place.”
Mr Maynard said people often found themselves in debt following experiences such as a sudden changes in circumstances including losing their job or ill health.
He added he was concerned aggressive action from creditors and pressure to repay debts at an unaffordable rate can lead families to cut back on everyday essentials including food.
They can also end up taking out other, expensive loans or falling further behind on essential bills.
The rise in personal borrowing has led to mounting concern that households who get into debt need safer ways to manage financial difficulties.