Debt advice is funded by a levy on lenders who no longer cause the debt

Debt advice commissioned by MaPS is funded by an FCA levy on consumer-credit and mortgage firms, around £78m, and problem debt has shifted decisively to household bills: energy, water, telecoms, council tax and debts owed to government itself, whose creditors pay nothing towards advice. MaPS funding supports just over a quarter of estimated advice capacity, and StepChange and Citizens Advice fundraise for the rest, partly through voluntary fair-share payments from banks. Government's own target of 3.7 million people receiving advice by 2030, against around two million now, is unfunded at the current levy scope.

Advice demand is at record highs while the funding base is structurally misaligned, with the sectors generating today's arrears free-riding on a shrinking pool paid by regulated lenders. Every pound of advice generates measurable returns; MaPS-funded advice boosted client incomes by £48m in 2024-25.

Legislate to extend the debt-advice levy to non-FCA creditors in energy, water and telecoms, and add a government contribution proportional to the public sector's share of problem debt. It is a polluter-pays funding statute.

// State-led: Instrument: statute extending debt-advice levy to energy, water, telecoms and government creditors.

Advice demand hits record highs and funded capacity covers barely a quarter, because the levy still falls on lenders rather than the utilities and government now generating the arrears.