What does the Standard Financial Statement mean for you?

The Standard Financial Statement is a single way at looking at your income and expenditure that is being adopted by all debt advisors and lenders – but what does it mean for you?

Recently, we changed the way we look at what you’re spending and what you’ve got coming in. When you complete your Annual Review or your circumstances change, the paperwork we send will look different.

That’s because we’re moving to the Standard Financial Statement (SFS). The SFS is a way for all advice providers and lenders to work off the same guidelines. This will mean more consistency in debt advice, and it’s backed by major advice providers, lenders and the Money Advice Service.

But will the SFS mean anything changes for you? Here’s everything you need to know.

What is the Standard Financial Statement?

The Standard Financial Statement (SFS) replaces the income and expenditure sheet or financial statement we usually send you and the lenders included in your DMP. It’s supported by the Money Advice Service (MAS), the Insolvency Service and many other organisations.

The SFS isn’t just for those providing debt advice – lenders and government organisations have also pledged to adopt it too. So, if a lender looks at your budget, it should look the same as it does with an advice provider.

This means that the way your income and expenditure is calculated will be consistent, whoever completes a financial statement with you.

Once advice providers and lenders have moved to the SFS, it will replace other financial statements. This includes the Common Financial Statement (CFS), as well as other statements that individual advice providers or lenders use.

SFS-image

How the Standard Financial Statement can help with savings

One big change with the Standard Financial Statement (SFS) is that it lets you save a small amount each month. This doesn’t mean you have to save though if you can’t afford it – it isn’t mandatory.

With the SFS, you can put away up to 10% of your disposable income every month. You can save a maximum of £20 a month.

By saving a small amount every month, you can prepare for any unexpected bills. So, if your washing machine breaks down or you need a new fridge, you’re more likely to be able to afford this.

Starting to save also helps you develop good financial behaviour for the future. This will help you move towards a place of sustainable financial wellbeing, so you’ll be able to manage your money goals better.

Will it change anything for you?

When you next complete an Annual Review with us, we’ll send you the Standard Financial Statement (SFS). This will look different to the paperwork you’ve had from us before.

But don’t worry – it’s got the same information as the income and expenditure sheet you usually get from us. This should mean you won’t notice any changes.

Will your affordable payment change?

No – the move to the Standard Financial Statement (SFS) shouldn’t make any difference to your affordable payment. As we explained above, the SFS does look different, but it contains the same details as previous income and expenditure sheets.

This means you’ll have the same disposable income as before – so your affordable payment shouldn’t change.

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