R3 welcomes loosening of entry criteria for Debt Relief Orders to exclude pension funds

Debt Relief Orders provide low cost debt relief for those overwhelmed by debts of up to £15000. Designed to help the most financially vulnerable, the strict eligibility criteria require assets of less than £300, debts of no more than £15,000 and surplus income of less than £50 per month.

R3 President Peter Sargent commented:

"When DROs were introduced in April 2009 we had concerns that debtors with any kind of pension pot were effectively barred from this form of debt relief. It seemed counter-intuitive to discourage even those with a very small pension pot, which would be included as assets and likely prevent them from being eligible for a DRO.

The announcement that those with a small pension pot will not have that value set against the asset ceiling of £300 is good common sense. We await further details on where this value will be set, but this should allow many more to take up this accessible and low-cost form of statutory debt relief."

Submitted by R3

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