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StepChange Debt Charity response to Bank of England Financial Stability Report

June 27, 2017

In response to the Bank of England’s Financial Stability Report, Mike O’Connor, Chief Executive of StepChange Debt Charity, said:

“The Bank is right to address the rapid growth of consumer credit but there may be consequences, including potential increases in the cost of borrowing. While the Bank’s focus is on broader economic stability, there needs to be greater consideration of the stability of the ordinary family’s household finances, especially the 8.8m people using credit for essential household bills1. Any increase in borrowing costs could tip households, many of which are already on a financial knife-edge, into serious financial hardship. The Government, regulators and banks, must collectively do more to support people who are struggling to manage their way out of debt in an affordable and sustainable way.

“Both the Labour and Conservative Party manifestos promised a Breathing Space scheme that would see people in financial difficulty given better protections and a safer way to pay down debt. As a measure with cross-party support we urge the Government to turn these proposals into a reality as soon as possible. The Financial Conduct Authority must ensure that lending is responsible and affordability assessments are robust. Lenders must do more to ensure that clients do not get into problem debt, for example, banks should not be increasing people’s credit card limits without being asked to and action must be taken to reduce the cost of overdrafts.

“Just a few years ago we saw high levels of consumer borrowing leading to increased numbers of people in problem debt, we cannot and must not to repeat the mistakes of the past.”

Notes to Editors

Turning Round Lives Held Back by Debt - StepChange election briefing 2017

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