Big debt does us no credit...
Action call as average adult owes £30k
THE Government must take urgent action to help hardpressed households deal with debt, MPs have warned.
A report from the Commons Treasury Select Committee also calls on ministers to act now to tackle a looming crisis caused by 12million people not saving enough into pensions.
It comes after figures from the Money Charity revealed Britain’s personal debt mountain – which includes mortgages – hit £1.58trillion in May... up from £1.54trillion a year ago. The average amount of debt per adult is now £30,670, or around 113.8% of average earnings. Today’s Treasury Committee report says too many families have too much debt and don’t have any rainy-day funds.
It recommends the Financial Conduct Authority brings in regulations to limit the cost of credit, including overdraft fees.
It also raised big concerns about the heavy-handed way local and central government debt collections, such as council tax arrears, are handled. Other recommendations include bringing the selfemployed into pension auto-enrolment and abolishing the Lifetime ISA because it’s too complicated and has been slammed by industry experts.
Nicky Morgan, who chairs the Treasury Committee, said: “Many households are facing challenges that are putting pressure on the health and sustainability of their finances.”
Citizens Advice said it had seen a more than 25% rise in bailiff problems since 2014. Chief executive Gillian Guy said: “The Government must now show it’s taking the issue seriously.”
Tom McPhail, of investment firm Hargreaves Lansdown, said: “The Committee deserves great credit for pinning the Government down on its responsibility for long-term household savings, investments and financial resilience.”