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The credit industry and money advice sector have today launched an improved version of the Common Financial Statement.
The Money Advice Trust (MAT), the British Bankers’ Association (BBA) and the Finance and Leasing Association (FLA) have worked together on the re-launch, which standardises the way money advisers and creditors communicate with each other about repayment offers. It aims to help more people in debt resolve their difficulties more quickly and easily.
First introduced in 2002, expenditure is measured by advisers against agreed trigger figures for categories of discretionary spending (drawn from the Office for National Statistics data for household expenditure) and comment made where the trigger figures are exceeded.
Following consultation with money advisers, advice agencies, creditors and government the statement will now have four trigger headings going forward – telephone, travel, housekeeping and other. Expenditure lines for pets, health, mobile and repairs/maintenance will be reallocated. Many of these had low total values and were hard to justify as stand-alone headings
In addition a ‘child multiplier’ will be introduced so that expenditure can be matched to actual child numbers in a household rather than an assumed average under the current system. Furthermore, children will be split into two age bands (up to 14 years and over 14 years) with different expenditure allocations.
A specific car expenditure allowance under the travel trigger figure will also be included.
Kevin Still, director of Eurodebt welcomed the move. He said: "Recent reports have highlighted that debt is now hitting people hard across all social groups. This means that it’s more vital than ever that there are some common benchmarks regarding living expenses for those wanting to recover debts and those trying to help indebted consumers.
"The revised Common Financial Statement will provide that benchmark and, as long as creditors apply some level of flexibility to take into account the recent unavoidable increases in household expenditure, then it should enable EuroDebt and others to be able to help more individuals."
The credit industry and money advice sector have today launched an improved version of the Common Financial Statement.
The Money Advice Trust (MAT), the British Bankers’ Association (BBA) and the Finance and Leasing Association (FLA) have worked together on the re-launch, which standardises the way money advisers and creditors communicate with each other about repayment offers. It aims to help more people in debt resolve their difficulties more quickly and easily.
First introduced in 2002, expenditure is measured by advisers against agreed trigger figures for categories of discretionary spending (drawn from the Office for National Statistics data for household expenditure) and comment made where the trigger figures are exceeded.
Following consultation with money advisers, advice agencies, creditors and government the statement will now have four trigger headings going forward – telephone, travel, housekeeping and other. Expenditure lines for pets, health, mobile and repairs/maintenance will be reallocated. Many of these had low total values and were hard to justify as stand-alone headings
In addition a ‘child multiplier’ will be introduced so that expenditure can be matched to actual child numbers in a household rather than an assumed average under the current system. Furthermore, children will be split into two age bands (up to 14 years and over 14 years) with different expenditure allocations.
A specific car expenditure allowance under the travel trigger figure will also be included.
Kevin Still, director of Eurodebt welcomed the move. He said: "Recent reports have highlighted that debt is now hitting people hard across all social groups. This means that it’s more vital than ever that there are some common benchmarks regarding living expenses for those wanting to recover debts and those trying to help indebted consumers.
"The revised Common Financial Statement will provide that benchmark and, as long as creditors apply some level of flexibility to take into account the recent unavoidable increases in household expenditure, then it should enable EuroDebt and others to be able to help more individuals."
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