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Press comment: Action needed as debt mountains rise 

02/05/2018

If you’re covering Andrew Bailey’s speech on high cost credit and John McDonnell’s announcement that a Labour government would look to cap overdraft fees and charges, please see the following comment from Jane Goodland, responsible business director at Quilter.

Jane says:

Jane Goodland“High cost credit is a blight on society fueling unaffordable debt that people often find inescapable, which can have a damaging effect on relationships, mental health and family life. It is therefore encouraging to hear Andrew Bailey setting out how it will be addressed including the possibility of extending the use of price caps beyond pay day loans to other forms of high cost credit and overdrafts. This follows John McDonnell’s announcement that a Labour government would also look to cap overdraft fees and charges.

“Action is needed as mountains of debt have been building. Consumer credit has been growing at an annual rate of almost 10% in recent years, a level not seen since before the financial crisis. Now interest rates are expected to rise, meaning people may start to feel the weight of their debt burden. Under this pressure people could enter a vicious circle of debt where they take on more so they can meet their current obligations. Caps will be crucial in avoiding such a devastating scenario as they stop people borrowing beyond their means.

“As Andrew Bailey notes, debt isn’t necessarily a bad thing. It can be a part of a healthy and properly thought through financial plan. In fact certain parts of the population are reliant on debt, such as the gig economy, who have fluctuating incomes.  As more people opt for this kind of work it’s more crucial than ever that people have the financial knowledge necessary to use debt responsibly.

“Andrew Bailey’s speech, however, highlighted that 18-24 year olds are racked with debt and have little knowledge of financial matters. This is indicative of the fact that personal finance education is currently not a compulsory element of the UK curriculum.

“A study by the Money Advice Service found that financial habits are formed as early as seven, so it’s critical to address the root cause of the problem and teach good financial practice as early on as possible. Teaching children the basics about when to borrow, what for and then how to plan to repay it is essential. Borrowing can then become a useful tool for improving someone’s life without it becoming unmanageable.”

For more information contact

Kathleen Gallagher023 8072 629307990 004932kathleen.gallagher@quilter.com
Alex Berry023 8072 626007741 151931alex.berry@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.7 billion in investments (as at 30 September 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.