You are here: Home - Saving-Banking - News -

Household savings and debt levels to be scrutinised

Written by: Paloma Kubiak
The influential Treasury Select Committee has launched an inquiry into household finances.

The Committee will look at the state of household savings in the current economic climate, and will scrutinise indebtedness as well as inter-generational and financial planning issues.

It comes as the UK’s household saving rate has fallen in the last year with statistics revealing that 15% of adults are over-indebted. There is now £200bn worth of consumer credit in the UK.

As such, the inquiry will look at whether policy can influence household savings levels, and given the economic climate, will aim to determine what the right level of savings should be for households and the UK economy.

The Committee will examine

  • Whether policies such as ISAs can help households achieve the right level of savings and whether the government can take more action to improve financial awareness and education.
  • Given the high house prices and decreasing rates of property ownership, does this affects lifetime financial planning, and what role does the state pension have in supporting finances?
  • Whether households are receiving adequate and/or appropriate financial advice in light of the pension freedoms introduced in April 2015.
  • Whether current levels of household debt and credit are sustainable, whether problematic debt is unmanageable and whether household incomes have become more variable as a result of the flexible labour markets, such as gig economy workers.

It wants to know what financial regulators are doing to monitor the issues of debt and whether suitable credit products have been made available to those on low incomes.

Rt Hon. Nicky Morgan MP, chair of the Treasury Committee, said: “It is 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 first evidence session of the inquiry will take place on Tuesday 14 November with Ashwin Kumar, chief economist at the Rowntree Foundation, Michael Johnson, research fellow, Centre for Policy Studies, and Torsten Bell of the Resolution Foundation.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week