Skip to main content
Advice Investments Wealth management
Search

Press comment: Action needed as FOS complaints on consumer credit surges

20 June 2018

Today the Financial Ombudsman Service issued its annual report, which revealed that complaints around consumer credit has surged 40% in 2017/18 after an 89% the previous year. Jane Goodland, responsible business director at Quilter, explains the increases serve as reminder that large parts of the population are financially vulnerable. She points out that recent research has revealed the power of financial education in primary schools and urges the government to tackle the growing addiction to debt.

Jane comments:

“Horrifying levels of complaints around consumer credit serves as a stark reminder that borrowing money is far from straightforward and is causing an increasing amount of distress, with people reverting to the Financial Ombudsman Service for help. Last year complaints around consumer credit rose 40%, following an 89% rise in the previous year. This is far and beyond expectations. Payday and instalment loans accounted for more than 18,000 complaints, compared with the 10,000 the FOS had projected.

“Debt is terrifyingly popular in the UK, with close to 13 million adults in the UK overdrawn in 2017 and 3.1 million of those either exceeding their limit or never arranging one, according to the Financial Conduct Authority. Meanwhile, high cost credit is used by over three million consumers in the UK. The FCA recently revealed its plan of attack on high cost credit, including a cap on rent-to-own. However, even when combined with other initiatives like the breathing space scheme, we are still leaving thousands of people vulnerable.

“The addiction to debt needs to be treated at the source, by teaching the public about the implications and how to use debt appropriately. A package of solutions needs to include equipping the next generation to make financial decisions through financial education to primary school students. A recent study* found that after exposure to financial education 91% of primary school students understood that concept of delayed gratification, a 23% increase. Meanwhile, 24% of those who couldn’t distinguish needs from wants before could do so at the end of the year and 70% of the follow-up sample were working towards a savings goal three months after the lessons. It would be irresponsible for the government to ignore the results of such a success story.”*

*Independent research group, Substance, analysed data from 1,444 pupils and 187 teachers at 86 schools participating in the Kickstart Money programmes, which was funded through the Money Advice Services’ What Works project. Quilter is part of KickStart Money, the work of twenty of Britain's leading savings and investment firms, brought together by TISA. The aim is to fill the gap in financial education provision in UK primary schools, by designing and delivering a scheme to at least 18,000 primary school children over the next 3 years. It has been evaluated by the Money Advice Service as part of the What Works initiative, with the ultimate target being government adoption of it as part of the National Curriculum. 

 

For more information contact

Kathleen Gallagher
023 8072 6293
07990 004932
kathleen.gallagher@quilter.com

 

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and the Multi-asset investment solutions business.

The Quilter plc businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • The Multi-asset business to Quilter Investors
  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The UK Platform to Quilter Wealth Solutions
  • The International business to Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.