How our new Covid Payment Plan can help people hit by the pandemic to get back on their feet

By Phil Andrew, Chief Executive, StepChange Debt Charity

Back in June, I blogged on how we were working flat out to come up with a novel addition to our debt solutions toolbox, to provide a pragmatic, short-term way of helping people facing an accumulation of Covid-related debt, but positive longer-term financial prospects. I’m delighted to report that registration for it is now open.

Some might say — just in time, as Government is sticking to its plans to unwind the main furlough and employment schemes and transition to lower-level support. This is the beginning of crunch time for households who aren’t yet ready or able to resume their own financial ‘business as usual’.

We’ve certainly had our fair share of twists and turns along the way. As an FCA-regulated organisation, we’ve worked hard to successfully complete all our required regulatory processes for this product, as well as facing a number of challenges in scoping the product against the backdrop of continuing uncertainty and shifting regulatory expectations that will still remain under review as the pandemic environment plays out.

We’ve also had to push through a huge amount of logistical and systems development to get there — but here we are, with a Covid Payment Plan (CVPP) designed and ready to receive expressions of interest, and fully up and running for eligible clients next month.

Let’s be clear — this isn’t nirvana, or a perfect solution. Those are in short supply right now. While we would have loved to come up with a way that enabled people to fully protect their credit status, for example, that simply wasn’t possible. Yet I’m incredibly proud of what the StepChange team have managed to achieve, that has the potential to help tens (or perhaps hundreds) of thousands of people. The CVPP offers a genuinely useful, maximum 12-month reduced payment scheme that will enable people to transition back to financial normality (or, if things don’t go as well as they expect, transition with minimal pain to a longer-term solution). If people have multiple debts, then liaising with individual creditors just doesn’t always work, however well creditors try — and this is true for Covid debt just as much as any other.

You can read up on the full detail of how it works here and there’s a short animation explainer here.

We owe huge thanks to the Treasury, the Money and Pensions Service, and a number of our creditor partners for their help in developing, allowing, supporting,or funding this new short-term transitional product.

We’re also grateful to a number of our suppliers and technology partners for moving at speed to help create the infrastructure to deliver it.

As we go through our own efforts to “Build Back Better”, we know that innovation and technology are important not just in meeting efficiencies, but in responding to people’s needs, at the time they have them and in the way they want. The CVPP has been a massive lesson in trying to do that.

We know the coming months won’t be easy for people, and we know that many will need the long-term structured debt solutions that are the traditional tools of our trade. But we’re hopeful that, if the economy is able to withstand the next phase and return to a healthier place, so will a number of the households who are currently under water. My heartfelt hope is that the CVPP will give plenty of them the right kind of buoyancy aid to swim to shore rather than getting pulled further out to sea.