DEMSA Summary: Duty / PS24-02 /Features / Collaborations / Events / Training

Summary – Find the full update here (including all the links & more)

The latest DEMSA bulletin discusses key issues this week, such as the financial strain on full-time employed clients of StepChange, advancements in commercial Variable Recurring Payments (VRPs) by UK Finance, and insights from recent financial events and conferences. The bulletin highlights ongoing challenges such as the increasing number of insolvencies and the need for enhanced data collection and financial crime prevention measures.

Key Points

  1. A report from StepChange indicates that 21% of their full-time employed clients are unable to meet financial demands despite receiving debt advice.
  2. UK Finance has published a report facilitating commercial VRPs, potentially enhancing payment flexibility in debt management.
  3. The FCA’s Consumer Duty information request (RFI) aims to review and enhance consumer support across various sectors.
  4. Recent events have focused on the sustainability of debt solutions and the importance of accurate affordability assessments.
  5. Financial education and vulnerability are highlighted, with a focus on providing better outcomes through more dynamic and regular affordability assessments.
  6. The bulletin details individual insolvency statistics for March 2024, noting a decrease in IVAs and bankruptcies compared to previous months.
  7. Upcoming regulatory changes include a consultation on updates to the Financial Crime Guide (FCG) and enhancements in data collection by the FCA.
  8. Partnerships and collaborations are noted as crucial for improving financial inclusivity and understanding the impact of mental health issues like bipolar disorder on financial behavior.
  9. The importance of acknowledging and supporting unpaid carers is discussed, with a call for governmental prioritization.
  10. The bulletin underscores the necessity of industry-driven initiatives over regulator-enforced requirements for a more effective management of financial services.
  11. A considerable focus is placed on events that provide platforms for discussing changes in financial regulations and their implications on consumer support.
  12. New tools and technologies are being explored to handle creditor distributions more effectively through VRPs.
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Key Statistics

  • 21% of StepChange clients in full-time employment are in a deficit budget.
  • 44% of StepChange clients seeking debt advice were full-time employed by December 2023, up from 38% in 2021.
  • The individual insolvencies in March 2024 included 681 bankruptcies, 2,628 DROs, and 5,399 IVAs.
  • Breathing Space registrations in March 2024 numbered 7,710, a 7% decrease from March 2023.
  • In Scotland, personal insolvencies in 2023-24 Q4 totalled 1,884, a slight decrease from the previous year.

Key Takeaways

  • Financial strain remains significant among full-time workers, despite access to debt advice.
  • Variable Recurring Payments could revolutionize payment flexibility in debt management.
  • Consumer support is a critical area of focus for the FCA, with forthcoming reviews set to impact a broad range of firms.
  • Financial education and managing vulnerabilities are essential for mitigating risks associated with financial decisions.
  • Data-driven approaches in financial management and insolvency solutions are becoming increasingly important.
  • Regular updates and consultations on financial regulations indicate a proactive approach to addressing emerging financial challenges.
  • Collaboration between various financial entities and non-profits is key to enhancing financial inclusion and support.
  • Recognizing the role of unpaid carers in the economy and their need for support is crucial for comprehensive policy-making.
  • The impact of the cost-of-living crisis continues to influence financial stability and consumer behavior.
  • Events and conferences play a vital role in disseminating information and fostering dialogue among stakeholders.
  • The application of new technologies and data analytics is crucial for the future of financial services.
  • Industry initiatives are preferred over regulatory mandates for fostering innovation and responsiveness in financial services.
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