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The Standard Financial Statement:Emerging Themes from Responses to the Consultation

February 2015

The Money Advice Service: The Standard Financial Statement:Emerging Themes from Consultation ResponseMoney Advice Service: Debt Advice Quality Framework 2

SectionSection

Contents

moneyadviceservice.org.uk

Introduction 3

Executive Summary 4

Summary of general points raised in the consultation 5 Broad support for a single tool 6 Ensuring adoption of SFS by creditors 7 Governance issues 8

Summary of consultation questions and responses 9 Question 1: Do you have any comments about the income and expenditure headings and categories? 10 Question 2: Do you have any comments about the savings category and our proposal for the way in which the savings amount is calculated? 14 Question 3: Do you have any comments about the spending guidelines methodology? 17 Question 4: Do you have any comments about the format? 18 Question 5: Do you have any comments about the timescales? 20

Next steps 21

Appendix 1 22

2

3

Introduction

The Money Advice Service: The Standard Financial Statement:Emerging Themes from Responses to the Consultation

IntroductionThe Money Advice Service has a statutory responsibility under the Financial Services Act 2012 to improve the availability, quality and consistency of debt advice services across the UK.Given the importance of debt advice interventions in people’s lives, it is crucial that debt advice is of the highest quality and consistently achieves the best outcomes for clients.

A standardised financial statement plays a key part in achieving high quality and appropriate debt advice outcomes. It enables an adviser to identify the options and debt solutions available to a client and it provides the foundation for effective repayment negotiations with creditors.

The Money Advice Service has worked collaboratively with Citizens Advice, Money Advice Trust and StepChange Debt Charity to develop a new Standard Financial Statement (SFS). We have also incorporated the feedback from a broader range of other organisations in the sector.

The newly developed SFS has a set of expenditure categories that group items to reflect people’s spending patterns and the way that today’s households apportion their money. Four of the categories are supported by guidelines (or trigger figures) that indicate reasonable spending levels based on the number of adults and children in a household. In addition the new tool incorporates a savings category to help clients become more financially resilient in the future.

The debt advice agencies we fund will use the SFS when it is available and integrated into their systems and we will also continue to engage with the rest of the advice sector. In addition to our ongoing engagement with the Insolvency Service and Accountant in Bankruptcy (AiB) we also continue to engage with Government departments and HM Courts and Tribunals Service to encourage widespread use of the tool across the sector.

In November 2014 we published a consultation paper on the SFS and received almost 100 responses from organisations and individuals across the sector. The feedback was broadly supportive of the tool, with some constructive amendments for the final version of the SFS. This document outlines the emerging themes from the responses, as well as how we will be taking the suggestions from the consultation forward.

We would like to thank everyone who has responded. A list of respondents can be found in appendix 1.

4

Executive Summary

The Money Advice Service: The Standard Financial Statement:Emerging Themes from Responses to the Consultation

Executive SummaryIt was encouraging to receive such a large response from a wide range of organisations in support of a single tool. We have worked collaboratively with the debt advice sector on this project and will continue to do so, to ensure the Standard Financial Statement is flexible enough to meet the needs of a diverse set of organisations; be they the debt advice providers, or those upstream who will receive the summary versions.

There were consistent themes which emerged from the response and which will shape our work going forward. We have taken into account the amendments suggested and are working to implement these on the SFS, where there is benefit to do so. We also acknowledge the need for this tool to be automated and have begun work to develop this in such a format. It was also very positive to see creditors proactively wanting to be involved in the final development of the SFS – we will ensure that we include debt advice agencies and creditors alike when we user-test the tool prior to launch.

An immediate priority for the Money Advice Service is to work on the governance structure for the SFS. There was a clear message from the debt advice sector, after having done so much good work to formulate this tool, that there needed to be a representative structure to ensure the tool is always aligned to broader changes in the economy. We are aiming to finalise and publish details of the governance framework for the SFS prior to the launch of the tool.

Another consistent theme which came through, and which we will be focusing on, centred on engagement with the broader creditor sector beyond financial services. From previous work, we know that an appetite exists on the part of other creditors to engage with the debt advice sector.

The Money Advice Service would once again like to thank all those organisations and individuals who responded and have helped shape our next steps. The level of positive interest shown in this tool is encouraging and we hope engagement remains strong.

5

Section

The Money Advice Service: The Standard Financial Statement:Emerging Themes from Consultation Response

Title of report Section

5

Summary of general points raised in the consultation

5The Money Advice Service: The Standard Financial Statement:Emerging Themes from Responses to the Consultation



Broad support for a single toolThere was a high level of support for the creation of a single tool. This was clear in responses from debt advice providers, large creditors and finance-industry trade associations.

Many respondents recognised the strength of a single tool as a means of advising clients consistently and building trusted communications between organisations. Based on the network advantages of adopting the SFS, there was a strong willingness by the majority of organisations to adapt their systems so that the tool is useable for them.

To this end, the Money Advice Service will continue to engage and support relevant stakeholders on a bilateral basis as well as at the industry level.

While there was strong support for the creation of the SFS, some respondents, particularly individual frontline debt advisors, asked for more clarity around the purpose of the SFS, and how this affected the use of other tools in the sector.

The purpose of the SFS as a tool is to achieve high quality and consistent debt advice. It enables an adviser to identify the options and debt solutions available to a client, and provides the foundation for effective repayment negotiations with creditors. This tool works towards providing all clients of debt advice, and all creditor recipients, with outcomes which are consistent across the debt advice sector.

We have developed the SFS to bring together the best components of the tools which are currently in use, while also addressing existing gaps - for example, by emphasising the ‘savings’ category. It is our expectation that the organisations we fund will adopt the SFS, while simultaneously phasing out the use of other tools. We expect there to be a transition period of up to 12 months between the introduction of the finalised SFS and complete adoption of it by our funded organisations.

Meanwhile, we encourage organisations to communicate the purpose of the SFS to their staff and embed this as part of training and development, especially with frontline advisors.



Ensuring adoption of SFS by creditorsA consistent message we received in responses from debt advice providers and creditors was the concern that the SFS may not be fully accepted by a broader set of creditors, such as non-financial creditors. In particular, whilst the ‘savings’ category was well received by respondents from the financial services sector, it was perceived to be controversial for those sectors not regulated to the same standard.

However we received responses from a number of large financial institutions who, in their role as creditors, were supportive of the SFS as a standardised communication tool and the savings category contained therein. The Money Advice Service has initiated meetings with non-financial regulators, such as those for utilities, who have expressed a clear need and appetite for a more consistent way of communicating and negotiating with debtors and debt agencies. This is an important area of work, and we intend to build on the enthusiasm that was expressed in non-financial sectors to engage with debt issues by building our network of relationships with representatives of these sectors.

The principle of savings was warmly received by the majority of respondents; however there were nuances surrounding this category – these are discussed in detail below under the specific consultation question.



Governance issuesDebt advice organisations reported that in order to fully support the SFS an assurance would be needed with regards to fair and representative governance. This was echoed by consumer representatives who expressed a desire for an accountable body tasked with updating and reviewing guideline amounts to ensure they are in line with changes in the wider economy.

We understand the need for the SFS to be managed and administered in a robust governance structure. While we are working on the details of this governance structure, we will be guided by the following principles;

nn Any governing body should have fair representation from organisations using the SFS.

nnWhile the administration and support for the SFS could be provided by another body, the Money Advice Service will chair any independent governance group that may be established.

We envisage the tasks of such a group to include, but not be limited to:

nn ensuring the widespread adoption of the SFS;

nn granting and, where appropriate, rescinding licensing permissions for the SFS;

nnmonitoring usage of the SFS in terms of volume of adoption, quality and consistency of use by all stakeholders; and

nn regularly reviewing and evaluating the SFS.

The SFS will be a living document, in that the trigger figures need to be updated to reflect broader economic changes. The role of reviewing and updating trigger figures on at least an annual basis will also be assigned to the governance group for the SFS.1

1 Gathergood, J. Money Advice Service Income and Expenditure Tool ‘Trigger Figure’ Calculations 2014. September 2014

9

Section

The Money Advice Service: The Standard Financial Statement:Emerging Themes from Consultation Response

Title of report Section

9

Summary of consultation questions and responses




Question 1: Do you have any comments about the income and expenditure headings and categories?From all of the responses received, we have extracted the additions and amendments which were suggested to incorporate them into the final version of the SFS. The key changes which will be included in the next version of the SFS are outlined below.

Amendments

Smoking ProductsThis category received strong resistance from a range of stakeholders including debt advice agencies, trade associations and creditors alike. It was felt that Smoking as a standalone category could invite moral judgements. It was proposed this was put in with household costs. It was also not apparent why this warranted a standalone category, when alcohol was included in household costs.

We have taken this feedback on board and in the next version Smoking Products will be a sub-category within Food and Housekeeping.

Council Tax ReductionThis sub-category featured within the Benefits section. A number of advisors felt this was misleading as it was not income to the client and could artificially inflate the income available to the client.

The Money Advice Service agrees that this could be misleading and we have removed this from the final version of the SFS.

Partner’s Name and D.O.BA large debt advice provider and a consumer organisation both questioned the need to outline details of the partner and could not support this aspect of the SFS. This was a view that was echoed by many other frontline advisors.

The Money Advice Service takes the view that the SFS should outline the debts of the client as an individual and accordingly, so as not to violate the privacy or the credit rating of a client’s partner, agrees with the above point. This category will be removed from the next version of the SFS.



Licence number

The Money Advice Service has removed the question which asked about vehicle licence number. This was in response to feedback which questioned the benefit of this question. The licence number is a unique identifier of any vehicles owned by the client, and does not add to the information the client, advisor or the creditor has with regards to income and expenditure of the client.

House Repairs/Maintenance ExpenditureA recurring view from individual debt advisors, and one that was also picked up by one of our funded organisations, was a need to include a category for housing repairs.

The Money Advice Service recognises the need to account for housing repair costs. Our previous research2 shows that people often fall into debt or default on repayments due to unexpected expenditure such as housing repairs. For this reason we have added this as a flexible cost within Food and Housekeeping.

Water waste and Water Supply

Many advisors, particularly those from the north of England, informed us that many of their clients are billed separately for water waste and water supply provisions. In order to assist them we have extended the Utilities category to include water waste as a separate sub-category.

Other DependantsDebt advisers told us that sometimes clients have dependants who are not children - this may be the case, for example, for carers, and those who also provide for adult children or elderly relatives. It is important to account for such expenditure and accordingly, we have included a category to enlist ‘other dependants’ in the final version of the SFS.

2 Optimisa, The Money Advice Debt Advice Review 2013/14, moneyadviceservice.org.uk/en/static/optimisa

https://www.moneyadviceservice.org.uk/en/static/optimisa



Employment A large debt advice provider reported that their advisors saw a diverse range of clients who weren’t adequately represented by the employment categories outlined in the SFS.

We know from our own research3 with our lead organisations that 16% of clients who received advice across all of the projects surveyed reported to be permanently sick or disabled. The same research also reported that for many clients the trigger for unmanageable debt was a major life event that reduced their income and/or increased required expenditure. Job loss and sickness/disability were the two most common reasons mentioned by clients.

Accordingly, we have expanded the options in the Employment section to capture the diversity of employment scenarios debt clients may be in. Other options available in the final version of the SFS will include ‘Carer’, ‘Student’ ‘Not working due to illness/disability’ and ‘Other’.

Salary and WagesA large number of respondents reported that many of their clients were not in conventional employment, and this in turn affected income - in particular, the SFS needs to accurately describe income which is not regular. This rise in unconventional employment can be seen nationally: according to the Office for National Statistics (ONS), the number of people employed on ‘zero-hours contracts’ rose from 134,000 in 2006 (0.5% of the workforce) to 1.4 million (3% of the workforce) in 2014. Meanwhile ONS also reported that self-employment in the UK in 2014 was the highest it has been in over 40 years, whilst average income from self-employment has fallen by 22% since 2008/09.4

The Money Advice Service has therefore taken on board the suggestions of amending the Salary and Wages category to rename it ‘Earnings’ and included a category named ‘Other (including earnings from self-employment)’

Other amendments in the final version of the SFS will include replacing ‘Caseworker name’ to ‘Contact team/name’ in order to enable debt advisors with diverse operating models to adapt it to their specific case management systems.

3 Optimisa, The Money Advice Debt Advice Review 2013/14, moneyadviceservice.org.uk/en/static/optimisa

4 ONS, Analysis of Employee Contracts that do not Guarantee a Minimum Number of Hours (April 2014) ons.gov.uk/ons/rel/lmac/contracts-with-no-guaranteed-hours/zero-hours-contracts/art-zero-hours.html

https://www.moneyadviceservice.org.uk/en/static/optimisa

http://www.ons.gov.uk/ons/rel/lmac/contracts-with-no-guaranteed-hours/zero-hours-contracts/art-zero-

http://www.ons.gov.uk/ons/rel/lmac/contracts-with-no-guaranteed-hours/zero-hours-contracts/art-zero-



Arrears and OverpaymentsA London based debt advice provider reported that their clients were often in arrears with existing debts (in addition to paying required instalments) and there needed to be space on the SFS to include this. We have therefore included a section in the long and summary version entitled ‘Arrears and Overpayments’ which should be used for arrears including Tax and VAT arrears, as well as Benefit overpayments.

Eliciting Greater CommitmentThe completed version of the SFS will also see the signature box moved to the beginning of the SFS. We believe this is likely to be more effective at eliciting commitment as shown by previous research where a similar commitment was elicited upfront for people filling out tax return forms and showed that people who signed the form at the beginning as opposed to the end, had more accurate returns.5

Assessing mid-term repaymentCreditors, debt management companies and a number of trade associations suggested it would be useful to include an indication of the predictability of a client’s ability to maintain repayments.

The Money Advice Service believes that this could also be an opportunity to assess the financial wellbeing of the client - particularly where, as highlighted above, income is variable.

The guidance for the SFS will include a need to review it over a 12-month period, or sooner if the advisor and client feel this is necessary.

Travel and transport costsThere was fairly broad support for moving ‘travel and transport’ costs into fixed costs, particularly from rural areas. However, some creditors and advisors questioned if this was appropriate, especially where clients were running expensive vehicles (when a cheaper option may be available).

A fixed cost category does not mean it cannot vary internally, and in line with industry best practice, an advisor should encourage a client to maximise income where there is an opportunity to do so. The fixed categories themselves are in recognition of their importance; however, variability within them is expected. This would also apply to changes due to seasonality effects, for example, school costs may decrease over holiday periods. We will enhance and provide more clarity on this point in the guidance.

5 Cabinet Office (2012), Applying Behavioural Insights to Reduce Fraud, Error and Debt, London: Cabinet Office (update.cabinetoffice.gov.uk/sites/default/files/resources/BIT_FraudErrorDebt_accessible.pdf)

https://update.cabinetoffice.gov.uk/sites/default/files/resources/BIT_FraudErrorDebt_accessible.pdf



Question 2: Do you have any comments about the savings category and our proposal for the way in which the savings amount is calculated? Building a savings category into the SFS was received warmly by most respondents including large creditors and trade associations who recognised the importance of building resilience against income shocks and unexpected expenditure amongst clients. We know the importance of savings in order to prevent people from falling into debt or escalating existing debts. Research6 conducted for The Money Advice Service showed that 25% of the people surveyed said if they received an unexpected bill, they would be forced to go into debt, or increase their debt, in order to pay for it.

Feasibility and impact of savingsHowever, whilst the concept of saving was strongly supported by respondents working with clients, some advisors, particularly those working with very low income and benefit dependent clients questioned the feasibility of their clients being able to save £10 per month (or 10% of the available income)

Our view is that encouraging the client to save is a behavioural point as much as a preventive one. In the supporting Guidance we highlight that savings is based on income left after outgoings have been paid but before payments to creditors- thus, we acknowledge that in some cases saving may be aspirational, however over time if the client is able to maximise their income, or minimise their expenditure, there is a mechanism which encourages them to save the surplus.

6 Money Advice Service, moneyadviceservice.org.uk/en/static/16-million-brits-living-on-the-edge-with-zero-savings

https://www.moneyadviceservice.org.uk/en/static/16-million-brits-living-on-the-edge-with-zero-saving

https://www.moneyadviceservice.org.uk/en/static/16-million-brits-living-on-the-edge-with-zero-saving



A view voiced from members of the DMC sector and some trade associations was that a requirement to save may have unintended detrimental impact by prolonging the amount of time a person spent in debt, thus exacerbating their existing indebtedness.

A debt advice session can be a useful opportunity to help people save, where they can. As emphasised above, building a savings habit is a behavioural point and is only accrued with income that is not used on outgoings. Research conducted for StepChange shows that half a million households could be prevented from falling into problem debt if they had £1,000 in precautionary savings, and that the protective effect of savings is most apparent for people on lower incomes.7 The Money Advice Service also highlighted last year that if people saved a modest amount each day, they may be better able to cope with most of the unexpected events that all too often can tip families into problem debt.

However, we do understand the need to formulate boundaries around savings so that the balance between savings and debt repayment might change once a certain amount of savings has accrued.

A large debt advice charity reported that their guidance on savings advises the client that there are different types of saving – long term; short term; savings for particular expenditure; saving for predictable contingencies; savings for longer-term resilience and protection.

An additional view on savings was to introduce a savings ceiling, rather than a flat proportion of available income, so that the balance between savings and debt repayment might change once a certain amount of savings has accrued.

We believe there is merit in exploring these alternative methods to ensure we have a method which results in the best outcomes, and that the accompanying guidance provides clarity for the debt advisor when they are talking to a client about savings.

Resulting from the consultation, The Money Advice Service will explore the alternative methods of saving by modelling scenarios on them and assessing the outcomes. We will work with a small group of interested respondents – including creditors – to refine the savings methodology in light of this scenario modelling.

7 StepChange, stepchange.org/Mediacentre/Pressreleases/Actionplanonproblemdebt.aspx

http://www.stepchange.org/Mediacentre/Pressreleases/Actionplanonproblemdebt.aspx



Saving ProductsA recurrent theme, which came through in the responses, was a need to have in place financial products that adequately cater to the needs of low-income clients. There was an expressed need for saving accounts which are targeted at, and designed for, clients who are likely to be saving during the course of their debt repayments, so that such savings could be separated from everyday expenditure. There was a view that unless this was done the savings category may unintentionally create clients to be ‘hostages to fortune’, whereby they are regularly dipping into savings and/or may be subject to additional criticism and enforcement pressure from creditors.

While the Money Advice Service does not endorse particular financial products, we would use this opportunity for financial institutions to note the appetite, as expressed by the debt advice sector, for a targeted savings account which incentivises and enables debt clients to save regularly.

In our final version of the guidance, we will also remind advisors that introducing their clients to deposit accounts is not a regulated activity so clients can be advised to put their savings into such accounts where there is a benefit to do so and an advice agency has established a relationship to enable this with, for example, a local credit union.



Question 3: Do you have any comments about the spending guidelines methodology?More InformationA number of respondents, mostly from the advice sector asked for more information on how trigger figures were ascertained and on the reasons for using the associated assumptions. There was some concern that using the lowest earning population quintiles would lead to unrealistic budgeting for households in debt who did not fit into this profile.

The Money Advice Service will enhance the guidance to provide more clarity around the trigger figures. In terms of detailed explanations of the methodology, we have been meeting with respondents on a bilateral basis to show them how the trigger figures were reached and would be happy to explain the mapping of granular-level expenditure data to stakeholders on request.

Public availability of trigger figuresA large debt advice provider and a consumer trade organisation, reported concerns around the lack of public availability of trigger figures. The former felt this policy would mean that their online self-help tools would not be useable by clients, while the latter felt this was counter to regulatory principles such as transparency and ensuring advice clients always make well-informed decisions.

In terms of the public availability of trigger figures, the Money Advice Service does not want to give the incorrect impression that the trigger figures are fixed allowances. We would urge debt advice providers with online tools to develop them in such a way that accepts ranges of values for the trigger figures that correspond to the category.

To this end, the Money Advice Service accepts that we need to develop more information around the individual trigger figures and give upper and lower limit ranges around them. It is anticipated this information would be featured in the final version of the guidance. To reiterate our earlier position, while we will refine our guidelines around trigger figures, the Money Advice Service will not, due to reasons outlined above, make trigger figures publicly available.

The Money Advice Service also continues to liaise closely with the Financial Conduct Authority to ensure there is no regulatory overlap with this body of work. The FCA have been supportive of the work so far, and are aware of the methodology proposed.

Updating and governance of trigger figures As we form the governance structure for the SFS, we would like to reiterate the earlier point that the governance group will be tasked with reviewing and updating the trigger figures regularly to ensure the integrity of the methodology, and the figures are reflections of changes to expenditure patterns and significant fluctuations in the rate of inflation.



Question 4: Do you have any comments about the format?One large debt advice provider did report that the format of the Standard Financial Statement (SFS) did not significantly improve on their own budget tool. They reported that category headings were broadly similar to those they used currently, and accordingly, adoption of a new tool would add systems costs without adding significant benefits.

With broad support for the SFS, there is an implicit expectation from creditors that client repayments have been calculated with a consistent methodology irrespective of debt advice provider. Accordingly, we require debt advice providers we fund to demonstrate that their adoption of the SFS will be done in such a way that it does not compromise the integrity of the methodology.

The Money Advice Service will continue to work with all providers to assess the impact of adoption of the SFS, and user-test the revised version of the SFS, in order to ensure that the methodology and the outcomes are not compromised.

The summary version

Many advisors and large creditors asked for income to be presented before costs on the summary version. The Money Advice Service agrees that this flows more logically and reflects the format of the longer version. On the summary version we have also amended and/or added other categories which now appear in the longer version (such as removing Smoking and adding Arrears and Overpayments).



Simplify and streamlineMany respondents, particularly the debt advice sector felt the SFS was very long and the categories were not logically ‘flowing’. They felt it would be too onerous for advisers to fill in and wanted a more streamlined version.

In the final version of the SFS, the sub-categories listing specific Benefits and Tax Credits will be removed. It is unlikely a given client would be claiming all the benefits outlined and so the other lines are unnecessary. We will however, outline the benefits in the revised guidance so that advisors are aware of what should be outlined within this category.

It is important that the full and summary versions are available to creditors on request. When considering offers of repayment many creditors will be content with the summary version. However we appreciate the view expressed by a number of creditors that when it is appropriate they value access to a full statement of income and expenditure.

Automated version of SFSA large portion of the debt advice sector reported the need for an automated version of the SFS. An automated version should have the following features:

nn the ability to display information by desired time period (e.g. weekly, monthly and/or annually);

nn the ability to choose relevant sub-categories from drop-down options (e.g. benefits and tax credits);

nn the ability to display and print off the SFS showing categories specific to the client;

nn the ability to extract the relevant information and send a summary version to creditors;

nn communicate the purpose of the SFS.

In conjunction with the hard copy of the SFS, the Money Advice Service will develop an automated version of this tool for the sector.



Question 5: Do you have any comments about the timescales?Systems Integration The majority of respondents did not report significant objections to the timelines, but asked the Money Advice Service to provide sufficient notice for when the SFS is expected to be fully implemented. However, there were some respondents, most notably a large telephone and online based debt advice provider who reported that the SFS would prove difficult to integrate into their current systems until April 2016.

As part of the user-testing phase of this project, the Money Advice Service will work closely with relevant stakeholders to better assess the impact of introducing the SFS. Given the strong support for the introduction of the SFS from the sector, including creditors, we will also work with the individual stakeholders who reported concerns about integrating their systems to assist them with adoption of the SFS as soon as possible, so they can also reap the network benefits of a sector-wide tool.

Aligning with ScotlandMany respondents, including creditors, picked up on the need to align work with upcoming developments in Scotland. The Bankruptcy and Debt Advice (Scotland) Act 2013 will require all debt advice providers in Scotland to use the Common Financial Tool (CFT) from April 2015, so questions were asked around how the SFS timelines align to this.

Throughout this work, the Money Advice Service has been working closely with the Accountant in Bankruptcy (AiB) who are planning to use the Common Financial Tool from April and have used it as the basis of their systems development.

The AiB agreed to incorporate the SFS when it is ready, subject to the re-laying of specific regulations; namely that AiB have ensured that the Bankruptcy and Debt Advice (Scotland) (BADAS) Act defines the “common financial tool” as the tool they will be using now and that this definition can be subject to change. We continue to work closely with AiB to ensure the workstreams remain aligned

User-testing

Given all of the changes above and the need to ensure the final design of the SFS incorporates all of the needs of the debt sector and creditors, we have taken on board suggestions from a number of stakeholders to include a user-testing phase before the next version of the SFS is formally introduced. We hope to include creditors in this phase of the project to ensure the SFS is easy to operate upstream as well as by debt advisors. In the first instance, we will be contacting those creditors who responded to invite them to take part. Other participants for the user-testing phase will be accessed via our key stakeholders to whom the use of the SFS is most pertinent.


Next steps Actions resulting from the consultation feedbackThere are a number of workstreams which have resulted from the consultation feedback; these are outlined below.

Targeted Engagement We are committed to working with key stakeholders to ensure sector-wide adoption of the SFS. This includes helping key stakeholder with integration issues, regulatory bodies within the financial services sector across all the nations of the UK, as well as non-financial creditors and representative bodies.

Scenario Modelling We acknowledge that there is a need for greater clarity around use of trigger figures and how the savings category operates.

As alternative methods were suggested for how savings could be implemented, we think it is worth modelling scenarios on these to test how they would affect a given scenario, and which method would result in best outcomes for a debt advice client.

As part of the scenario modelling work, we will also explore upper and lower boundaries within trigger figures so that advisors can guide clients with more precision. These ranges can also be utilised for online tools which may require more precise figures to operate in.

Technical amendments to SFS and enhancing the guidanceWe are amending the draft version of the SFS, in terms of its design and format, and the corresponding guidance, as outlined above in detail. We plan to have this version completed by late February 2015, ready to begin the user-testing phase.

Development of automated version of the SFS We also acknowledge the need for the sector to have an automated digital version of the SFS. This work will start in April 2015 and be finalised by the summer.

User-testing of the SFSThere is a need to ensure the SFS flows in a logical sequence for the advisor in their interaction with the client. We will include creditors in this phase of the work.

We also believe this work will give us an indication of the impact adoption of the SFS will have on an organisation. In the first instance this work will be initiated with our key stakeholders in the debt sector, and those creditors who expressed their interest to be involved in the consultation responses.

Development of the governance structure This is an immediate priority for us. We will be developing the governance structure for the SFS and it will be based on principles of fair, representative and transparent governance which the Money Advice Service, in its independent role, will be responsible for, on behalf of the sector. We hope to publish details of this by Spring 2015.

Subject to outcomes from the above workstreams, we are aiming for launch of the revised Standard Financial Statement by summer 2015.

Next steps


Appendix 1

Appendix 1List of Respondents to the Consultation

Association of British Credit Unions Limited

Advice NI

AdviceWorks

Apex Credit Management Limited

Association of Professional Debt Solution Intermediaries Limited

British Bankers Association

Bedford CAB

Bristol Citizens Advice Bureau

Bromley Citizens Advice Bureau

Bromley Community Counselling Service

Burnley and Pendle Citizens Advice Bureau Nelson

CAB - Fareham

Capitalise/Toynbee Hall

Cassiltoun Housing Association

Cheshire East CAB

Cheshire East Citizens Advice Bureau

Chiltern Citizens Advice Bureau Ltd

Christians Against Poverty

Citizens Advice

Citizens Advice Scotland (CAS)

Citizens Advice Shropshire

Copeland CAB

Corporate and Community Services Department

Council of Mortgage Lenders

D&G Citizens Advice Service

Dacorum CAB

Debt & Education Specialist

St Andrew’s Community Network

Debt Management Standards Association

Dorchester CAB

Debt Resolution Forum


Appendix 1

Dudley CAB

Dudley District Citizens Advice Bureaux

EMH Homes

Esher & District Citizens Advice Bureau

Finance and Leasing Association

Forest of Dean Citizens Advice Bureau

Guinness Hermitage

Haddington Citizens Advice Bureau

Herefordshire CAB

Herts Aid

Homemaker Southwest

HSBC Bank plc

Huntingdon Area Money Advice

Institute of Credit Management

Irish League of Credit Unions

Jubilee Money Advice Service

Lambeth Law Centre

Lead Officer Money Advice

Regulatory Services

Leatherhead CAB

Leeds Citizens Advice Bureau

Luton CAB

MACS

MALG

Mid and East Surrey Mental Health Outreach

Money Advice Group

Money Advice Supervisor

Citizens Advice & Law Centre

Money Advice Trust

Money Village

MoneyPlus Group

National Consumer Federation

Nationwide

New Community Debt Advice Service

North Hertfordshire & District Citizens Advice Bureau

North Lanarkshire Council


Appendix 1

North Somerset CAB

Payplan

Pentagon Group

Portsmouth County Council

Royal Bank of Scotland

Renfrewshire Council

Shelter

Sherwood Forest Money Advice Centre

Shoosmiths LLP

SMART Money Advice Project & ASSIST Tenancy Support Project

Grampian Housing Association

SMART Money Advice

Grampian Housing

StepChange

Student Services Centre, University of Surrey

Talking Money

The Charity for Civil Servants - For You By You

The Debt Counsellors

The Institute of Money Advisers

Torfaen CAB

Trinity Cheltenham

UK Cards Association

Uttlesford CAB

Vanquis Bank

Wakefield District Citizens Advice Bureau

Walsall Council

Walsall-Welfare Rights Service

Walton Cab

Wessex Water

West Dunbartonshire Council

West Kent Debt Advice

West Oxfordshire CAB

Wirral Citizens Advice Bureau

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The Standard Financial Statement · Advice Trust and StepChange Debt Charity to develop a new...

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Transcript of The Standard Financial Statement · Advice Trust and StepChange Debt Charity to develop a new...