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Press comment: FCA action on high-cost credit welcome, but won't cure drug of debt

31/05/2018

If you’re covering the Financial Conduct Authority’s review and action on high-cost credit please see the following comment from Jane Goodland, responsible business director at Quilter. The FCA’s crackdown includes immediate rules to increase transparency on overdrafts and considering a cap on rent-to-own prices.

Jane GoodlandJane says:

“Improper use of debt has the capacity to disrupt the entire social fabric. Financial difficulty can lead to the deterioration of relationships, health and family life. However, people can access such credit and enter into debt with great ease. Steps to raise transparency and reduce the potential harm of this kind of debt was desperately needed, but they will not ease the UK off its current addiction to the drug of debt.

“Debt is terrifyingly popular in the UK, with close to 13 million adults in the UK overdrawn in 2017 and 3.1 million of those either exceeding their overdraft limit or never arranging one.* Meanwhile, high-cost credit is used by over three million consumers in the UK, some of whom are among the most vulnerable in society.

“There are many reasons why people end up in debt and use expensive credit products. But a contributing factor is undoubtedly a lack of financial capability. Too many people struggle to plan ahead and take control of their financial choices by making informed decisions, and bury their head in the sand. This can easily become problematic. To counter this, we need to make sure people are empowered to take control of their finances, and feel confident making careful and deliberate choices about money.

“Financial education is key and it needs to start from a young age, as one in nine 18‑24 year olds are already in financial difficulty.

“We have had the introduction of a breathing space scheme, cap on payday loans, ban on pension cold calling and now action on high-cost credit. These are all good initiatives, but a time has come for the government to stop treating the symptoms and turns its attention to a finding a cure. This needs to include equipping the next generation to make financial decisions through financial education.”**

 

*FCA Financial Lives Survey

** Quilter supports KickStart Money, a ground-breaking collaborative project that aims to take financial education to over 18,000 primary school children and supports calls for financial education to become a compulsory element of the Primary National Curriculum.

For more information contact

Kathleen Gallagher023 8072 629307990 004932kathleen.gallagher@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.