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StepChange comments on rate rise and FCA cost of living reminder to firms

16 June, 2022

In the light of today’s Bank of England interest rate rise to 1.25%, StepChange Debt Charity says that, although only 15% of new clients who have sought debt advice so far this year are home-owners, the steady rise in interest rates is likely to be feeding through to additional pressure on mortgage holders and they need to know where they can get help.

Meanwhile the Financial Conduct Authority, having found that some firms were failing to meet their obligations adequately on forbearance, has also today written to 3,500 credit lenders reminding them of their responsibilities to customers experiencing cost of living financial pressure – including their responsibility to signpost to free debt advice.

Richard Lane, Director of External Affairs at StepChange Debt Charity, said:

“Taken together, today’s rate rise and the FCA’s reminder to firms to treat their customers fairly suggest that the cost of living crisis still looks set to get worse before it gets better, even with the support measures that the Government has so far announced.

“We urge anyone beginning to experience financial pressure or debt problems to take action rather than simply hoping things will improve. Do talk to your lenders, and if that feels difficult or overwhelming then contact a reputable debt advice charity (you can do this online if you prefer). If that still feels too much, then start by looking at our cost of living guide for help on how to get started with addressing your cost of living debt pressures.”

StepChange says that customers experiencing financial pressure will often need a holistic approach – especially bearing in mind the significant pressure arising from other sources such as energy bills.. However much individual firms support their own customers, if those customers have multiple debts across multiple creditors, these need to be considered in the round to establish a truly sustainable position. However, at a time when online search results for debt help continue to be plagued by charity impersonators and misleading advertising practices, it’s also important to take care – find out how here.

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