The Money and Mental Health Policy Institute, the charity set up by Martin Lewis, warns that people with mental health problems and other complex needs would be particularly affected by cuts to face-to-face debt advice.

The charity is urging MaPS to protect funding for face-to-face debt advice, to ensure that vulnerable people don’t miss out on this critical lifeline.

Research by the charity has examined the implications of the ongoing recommissioning of debt advice services in England, overseen by the Money and Pensions Service (MaPS).

The research suggests that the new procurement process will make debt advice more available to people across the country thanks to an increase in overall annual funding, and will give the sector more stability through longer contracts for debt advice providers.

Some of the new changes will also enable debt advice providers to better accommodate clients with complex needs – for example, new stipulations that some advisers are given training in how to better support clients with mental health problems.

However, Money and Mental Health is warning that the recommissioning process will almost certainly result in significant cuts to face-to-face debt advice. This is due to MaPS’ decision to allocate 55% of debt advice funding to national debt advice providers. These organisations are better equipped to provide remote advice – such as online automated advice – than face-to-face support.

The new contracts for national providers don’t include any requirements on what channels debt advice providers use to offer support, and how much they should allocate to face-to-face help. This means that national debt advice providers will have no requirement to protect face-to-face support.

While these changes might result in more people being able to access debt advice, for many people this is likely to be automated online services. Money and Mental Health is warning that these changes come at the expense of people in debt who have complex needs, who are more likely to require face-to-face support to engage with debt advice.

The charity has written to the government to share these concerns, and is urging MaPS to pause the recommissioning process in order to protect the availability of face-to-face advice.

Martin Lewis, chair and founder of the Money and Mental Health Policy Institute, said: “Part of the problem stems from the fact that MaPs is leaving it to national debt advice providers to decide how much funding goes to face-to-face support. That will leave them making a call based on their own user-base, but what is needed is a top-level coordination to ensure that across the UK the right balance of different types of advice is being met. By choosing this way of operating, MaPS is in effect abdicating responsibility and risking a collapse in provision of face-to-face advice for those who need it.

“MaPS has a difficult job, and there are no easy choices here, but we think the best thing is for it to pause this recommissioning process, publish the evidence to back up these changes, and to put in place a minimum quota of funding that must go to face-to-face debt advice. At a time when so many people are experiencing debt and distress, that will be vital in ensuring that vulnerable people who need access to face-to-face support don’t miss out.”

Helen Undy, chief executive of the Money and Mental Health Policy Institute, said: “For people with mental health problems, it’s vital that debt advice is accessible through a range of different communication channels, including face-to-face. Some people may struggle to leave the house, and will only be able to access support online or via telephone.

“But for others, being able to speak to an adviser face-to-face is critical in helping them engage with debt support and avoid really serious financial difficulty. While our research supports the expansion of online and telephone-based advice, this must absolutely not be at the expense of the face-to-face services that are relied upon by some of the most vulnerable people.

“We are really concerned that people who have serious mental health and financial problems will lose out from the changes MaPS is making to debt advice services, and that many will be left unable to get help. We urge MaPS to rethink this process, and to take steps to ensure that people in debt can get the support they need, through a channel that works for them. That really could be the difference between vulnerable people getting a vital financial lifeline, or falling into serious financial hardship.”