Action call as average adult owes £30k

BY TRICIA PHILLIPS 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 about 113.8 per cent of average earnings. Today’s Treasury Committee report says too many families have too much debt and don’t have any rainy-day funds.

They recommend the Financial Conduct Authority bring in regulations to limit the cost of credit, including overdraft fees.

It also raised big concerns about the way local and central government debt collections, such as council tax arrears, are handled. Recommendations include bringing the selfemployed into pension auto-enrolment and abolishing the Lifetime ISA as it’s too complicated and has been slammed by industry experts.

Nicky Morgan, who Nicky Morgan 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 they had seen a more than 25 per cent rise in bailiff problems since 2014. Chief executive Gillian Guy said: “The Government must now show they’re taking the issue seriously.”

Tom McPhail, of investment firm Hargreaves Lansdown, said: “The committee deserve great credit for pinning the Government down on their responsibility for long-term household savings, investments and financial resilience.”