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AdviceUK’s Sustainable Debt Advice Project Friends Provident Foundation Grant holder Conference

AdviceUK’s Sustainable Debt Advice Project Friends Provident Foundation Grant holder Conference 25 July 2013 Andrew Hull AdviceUK Sustainable Debt Advice Project Co-ordinator. In 2010: The free debt advice sector did not have the capacity to meet demand

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AdviceUK’s Sustainable Debt Advice Project Friends Provident Foundation Grant holder Conference

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  1. AdviceUK’s Sustainable Debt Advice Project Friends Provident Foundation Grant holder Conference 25 July 2013 Andrew Hull AdviceUK Sustainable Debt Advice Project Co-ordinator

  2. In 2010: The free debt advice sector did not have the capacity to meet demand Demand increasing and capacity reducing with cuts in public sector funding No provision for ‘low offer / token payment’ clients Exploring: Alternative sources of funding for the free debt advice sector? Improved sustainability of debt repayments for clients and creditors? SDAP was established to address issues facing debtors and the debt advice sector

  3. SDAP tested fast track DMP / IVA referrals and a ‘Lo/To’ payment disbursement mechanism Client Advice Agency Diagnostic Interview Low offers/token payments < £50pcm Other options DROs/bankruptcy/ AOs/write-offs etc. DMP/IVA/TD >= £50 pcm % fair shares or IVA introducer fee % contribution Payment disbursement system (Priority & non-priority debts) Advice agency assists client as normal Payplan Standing Order Basic Bank Account Payment Card

  4. Paylink – Low Offer / Token Payments 308 clients successfully set up SDAP option £2.9 million debt £9,300 per month surplus income 49 more clients in the pipeline Payplan – DMP and IVA Referrals 162 clients successfully set up SDAP option £3.1 million debt £26,000 per month surplus income 52 more clients in the pipeline Winner of the IMA’s Best New Initiative Award 2013 470 clients benefitted, with a total debt of over £6m and £35,000 per month surplus income

  5. The model worked: Clients improved their well-being Clients committed to continuing repayments At least cost neutral for all involved in delivery It may have limited application: Low volumes of cases (hampered by technology issues?) Unlikely to generate significant income streams Proceed cautiously with any further rollout: Improve the technology Work with others in the sector The evaluation found that the model works but it is a marginal decision whether to roll it out

  6. Gap in provision for ‘token payment / low offer’ clients Challenges for culture and practices: Agencies willing to pass on cases? Mix of delivery channels? Is a sector-wide solution possible? Co-ordinate different initiatives? SDAP Citizens Advice’s DMP pilot project with StepChange Money Advice Service’s common data project, etc. Funding challenges: Technology for SDAP or integration across the sector Creditors providing funding through Fair Share and the Financial Levy Implications for future financial inclusion efforts

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