People with problem debt could be given a six-week breathing space, the government has confirmed.It follows pressure from rebels in the House of Lords, who had threatened to vote down the Financial Guidance and Claims Bill later on Tuesday.They wanted the bill amended to include the breathing space idea.But the Treasury has now confirmed that help for those in debt will now be the subject of a consultation, and will become law by 2019.The concept had been promised in the Conservative party manifesto, and was mentioned in the Queen’s Speech.Credit card debt ‘made me want to die’
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However, the rebels – led by former pensions minister Ros Altmann – still want a ban on pensions cold-calling to be included in the bill.The Department for Work and Pensions announced in August that a ban would happen, but as yet there is no date.It told the BBC that a bill would be brought forward “when time allows”.’Far-reaching impact’ Under the government plan, those people affected by debt would be exempted from further interest, charges and enforcement action in order to give them a chance to seek advice.That exemption period could last up to six weeks.
The government says that causes of debt can range from the sudden loss of employment to a more gradual dependence on debt to make ends meet, with many people waiting 12 months or more before seeking help.The Economic Secretary to the Treasury, Stephen Barclay, said: “For many people in the UK problem debt seems impossible to escape. Its effects can be far-reaching, impacting all aspects of a person’s life and leaving them feeling helpless.”That is why we are working to give people who are overwhelmed by debt, more time to seek advice, find a workable solution, and help get their lives back on track.”It will meet key industry representatives from charities, debt advice organisations, lenders and creditors in order to gather views. Members of the public, particularly those affected by the issue, are also being asked for their views.Cold-callingThe Conservative rebels will still push for an amendment to the Financial Guidance Bill to include a ban on pension companies cold-calling consumers.It is illegal to cold-call someone to try to sell a mortgage, but as yet not a pension.Cold-calling ban to include texts and emails
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Many people have been scammed, after being persuaded to withdraw cash from their pension and move it to unregulated investments, such as storage schemes or car-parking spaces.”The government has talked about banning cold-calling – it’s talked about protecting pensioners – but in fact it hasn’t done anything yet,” said Ros Altmann.”This bill is an ideal opportunity to actually put some legislation in place that would ban cold calls.”