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Treasury committee to probe debtors' financial planning

Treasury committee to probe debtors' financial planning

Concern over consumer debt and lack of saving has prompted the Treasury Committee to launch an inquiry into household finances.

The scope of the Committee will be a "broad look at the state of UK household balance sheets, including whether households are saving adequately in the current economic environment".

The inquiry will look at problematic indebtedness, inter-generational issues, lifetime financial planning, and the effectiveness of the market in financing solutions and products to low income households.

Nicky Morgan MP, chair of the Treasury Committee, said: “The UK’s household saving rate has fallen in the last year [and] 15 per cent of adults are over-indebted.

"And there is £200bn worth of consumer credit in the UK. It is therefore timely for the Committee to launch an inquiry into household finances.

“Debt is a huge emotional burden for people. Unstable personal finances often emerge as problems raised by constituents, so we hope to take evidence for this inquiry from around the country.

"We will examine what policies could support households in achieving appropriate levels of saving, and the sustainability of the UK’s household debt and consumer credit.”

The Financial Conduct Authority recently revealed that 15 per cent of people would struggle to pay their mortgage if repayments went up by less than £100 per month.

The first evidence session of the Treasury inquiry will be on Tuesday 14 November with Ashwin Kumar, chief economist at the Rowntree Foundation, Michael Johnson, research fellow at Centre for Policy Studies and a representative from the Resolution Foundation.