The Financial Conduct Authority’s announcement that it will crack down on high-cost credit can’t come soon enough. The FCA reports that high cost credit is used by three million people in the UK.
Our Co-Founder of Neyber and Trustee of StepChange Debt Charity, Monica Kalia said:
“Unsecured debt per household is reaching a record high of £13,900 in 2017 according to the Trades Union Congress (TUC). Indeed, the Money Advice Service, reports that six in ten working age people are currently struggling to get on top of their monthly budgeting and financial commitments, and StepChange have cited 3 million people in the UK behind on household bills. There’s a risk that a lack of access to affordable credit could push more vulnerable households into problem debt."
Going forward there are two actions that we feel are essential:
• Employers and the Government need to work together to create a more financially inclusive environment. People should have access to a range of financial capability tools and be able to arrange fairer lending products as standard. • Children should be taught in schools how to manage budgets and the importance of credit scores, at a minimum.
"There is no doubt this is a step in the right direction, we have long argued for the suppression of high cost credit. In our work with UK businesses, we regularly see cases where employees have used forms of short-term borrowing at high interest rates to meet essential day-to-day needs. This leads to debt spiraling out of control and life can seem to be unmanageable. The Government needs to look creatively at working with businesses to provide low- and no-interest loans and education as to how to use credit safely."
To find out more about how you can empower your employees to improve their financial wellbeing, contact us at firstname.lastname@example.org