“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.