Commenting on the FCA’s proposed measures to support consumers by making credit costs more manageable, Linda Ellett, UK head of consumer markets at KPMG, said:
“The FCA has put forward sensible proposals to help those struggling with the most costly forms of credit. Such a move recognises that whilst in theory consumer spending is good for the economy, we know that millions of adults are now struggling to balance the books.
“For some it might be the case that their income is just not covering basic needs, meanwhile for others it is about trying to service debt they took out expecting higher wages which have just not come about. Financial anxiety has a detrimental impact on productivity, ultimately hurting the economy in the long-run.”
Paul Martin, UK head of retail at KPMG, added:
“Over recent years a sizable portion of UK retail sales have been fuelled by consumer credit resulting in increasing levels of household debt.
“It’s unsustainable for growth to come at the expense of mounting consumer debt, and this credit had been readily available for so long that consumers have become dependent on it, if not complacent about it. Adding to the concern, 45% of UK adults struggle with everyday financial tasks, like how a percentage change impacts a loan, according to research conducted recently for National Numeracy Day.
“With current distress on the high-street, retailers need to balance their desire for commercial growth with consideration for wider societal issues, including sustainable consumer finance.”