Scotland to adopt Standard Financial StatementPrint publication
Walker Morris Banking & Finance Litigation partner Louise Power provides an update on Scotland’s proposed adoption of the Standard Financial Statement.
Common Financial Statement à Standard Financial Statement
The Standard Financial Statement (SFS) – a tool for assessing income and expenditure and guidelines (also known as ‘trigger figures’) on household expenditure – was launched on 1 March 2017 and intended to be used by all those involved in debt management and advice (including creditors, debt advice agencies, insolvency practitioners, utilities, trade associations and others) to produce consistent results across the UK.
The SFS was also intended to improve and streamline the customer journey, as the transfer of standard financial customer information between agencies should reduce the number of times affordability assessments have to be completed; and reduce the risk of discrepancy between, say, a customer’s affordability assessment with their creditor and with a debt advice agency; and enable customers to more easily compare debt management options.
However in Scotland another tool – the Common Financial Statement (CFS) – has so far been used for assessing affordability.
In September 2018, the Accountant in Bankruptcy (AiB), the Scottish Government’s insolvency service, announced that draft legislation for the introduction of the SFS to Scotland – in place of the CFS – has been laid before Parliament and is expected to come into force on 1 April 2019. The timescale should give organisations within the money advice sector the opportunity to ensure that staff are trained, and IT systems are compatible, in time for the switch over.
The draft legislation can be accessed here.
The AiB has set up a webpage concerned with the introduction of the SFS to Scotland and has stated that a training site will also be established prior to introduction of the new rules.
Walker Morris will continue to monitor and report on any key developments.