FCA urges Government action on soaring consumer debt

FCA chief executive Andrew Bailey has urged the Government to take action on consumer credit as personal loans soar while wages fall.

Bailey told The Guardian consumer credit is at the centre of the regulator’s agenda this year.

UK households have amassed £200bn in unsecured debt and consumer credit is rising at a rate of just under 10 per cent a year, while inflation has seen real wages fall 0.4 per cent.

Bailey says he has been visiting debt charities across the UK where he has seen many people facing difficulties with frontline debt such as council tax and utility bill arrears.

Bailey adds that the gig economy has prompted many workers to access credit to smooth over their income.

“It needs government involvement,” Bailey says.

The FCA is currently conducting a review into the car loan market and also working with charities and other industry bodies to discuss the state of the rent-to-own market, which is used for buying household items like fridges and washing machines.