The CCTA welcomes the IFS report today, but we would guard against rash decisions on blunt instruments such as rate-capping suggested by some third parties.

The ongoing dialogue and regulatory changes are resulting in meaningful solutions and positive outcomes for consumers. Further regulatory instruments and unwise intervention would mean reduced access credit and increased cost of credit.

It should also be noted that the recent FCA Insight research found that short-term, high cost credit is not the cause of growing debt levels. Much of the growth is produced by the borrowers least likely to suffer financial distress. Motor finance and 0% credit cards have accounted for the majority of consumer credit growth since 2012 and about half of outstanding consumer credit is held by those with mortgages. Around 40% of households with consumer credit debt hold savings in excess of their debt.

You can read the IFS report at this link:

https://www.ifs.org.uk/publications/10336

Greg Stevens

CEO

16th January 2018