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.