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Debt advice levy could see banks pay £100m more

Banks could be asked to contribute an extra £100m towards the cost of debt advice, under plans being pushed by the government’s new guidance service.

Former FSA boss Sir Hector Sants, now chair of the Money and Pensions Service, tells the Times he is highly likely to demand an increase in the debt advice levy, so that impartial, free debt counselling could be offered to everyone that wanted it.

Currently only around a third of those with debt difficulties receive help, the Times quotes Sants as saying.

The levy is used to fund sessions from the likes of charities Step Change and Citizens Advice, but there can be long waiting times for the services.

An extra £100m would roughly double what is currently contributed by the banks, and Sants says he has already held positive discussions with banks regarding the way forward.

“It’s early days, but the climate has shifted in the last few years,” Sants says. “Firms are keen to be seen to be contributing to wider social purpose.”

The Money and Pensions Service is the new government guidance service that has combined The Pensions Advisory Service, Pension Wise and the Money Advice Service under one entity.

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