The “Common Financial Statement” is a standard budget format which helps creditors, advisers and people with debt get a clear picture of an individual’s or household’s financial situation.
While lauded by many people, it is to be shortly replaced by the “Standard Financial Statement” (“SFS”) which similarly summarises a person’s income and outgoings along with any debts they owe.
However, it has been reported that a Holyrood Committee want the introduction of the “SFS” to be postponed to enable the system to be reviewed further. It is possible that the proposed March 2019 date for its introduction be postponed by as long as a year. This is because that under the SFS the “trigger figures”, which set the level of repayments to take account of necessary household spending, are less flexible and require more evidence before being approved. As such, the Committee concluded that those in debt would be more likely to struggle with repayments and that this would result in more work for money advisers.
The Economy, Energy and Fair Work Committee have stated that the review would consider a minimum income standard for debtors, reducing the administrative burden on money advisers and providing more scope for the exercise of professional judgment.
One issue will be that the introduction of the SFS will provide a consistent UK approach. Some may see an opportunity lost if Scotland has a different approach, although “Scottish Solutions for Scottish Problems” may yet prevail.
For further infomation please contact Stephen Cowan on 0141 572 4251.
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