KPMG in the UK's Linda Ellett and Paul Martin comment on the FCA's proposed measures to support consumer, by making credit cost more manageable
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.”
Notes to editors:
The Financial Conduct Authority’s Outcome of high-cost credit review can be found: here.
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About KPMG in the UK
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.