The Treasury Select Committee has today published its report
'Household finances: income, saving and
debt.'
In the summary it states: The finances of UK households have
improved in a number of ways since the financial crisis. But
households are facing a series of economic challenges and changes
that will continue to place them under pressure.
Against this background, the Committee has identified some
important points of weakness in the household balance sheet that
require action from the Government. Substantial numbers of
households are over-indebted or at risk of it and are vulnerable to
aggressive debt collection; have little or no precautionary
savings; have insufficient pension savings; and are dealing
Household finances: income, saving and debt and that Treasury
Ministers are ultimately responsible for ensuring that low rates of
saving or high rates of indebtedness do not imperil long-term
economic stability or living standards. (Paragraph 34)
The Government and the Treasury needs to take full and active
responsibility for helping households to ensure that their finances
are as resilient as possible and well-placed to support their
standard of living throughout their lives. The financial services
regulators and guidance bodies have important roles to play in
this, but they have more limited mandates and policy levers. The
Government should not pass the buck to them.
To read the full report, CLICK
HERE
Commenting on the report which argued that the “Government must act
now to tackle looming crisis from 12 million pension under-savers”,
Ben Franklin, Assistant Director of Research and Policy at the
International Longevity Centre – UK (ILC-UK) said:
“Auto-enrolment has successfully led to millions more saving each
month towards a pension, but the Committee is right to call for
action to get people saving more. We are pleased they support our
recommendations to consider automatic escalation of pension
contributions for some individuals, and we agree that a strategy
is needed to automatically-enrol the self-employed.
“With pension freedom comes pension responsibility, however the
general public deserve support in navigating the often
complicated world of decumulation. The International Longevity
Centre has been calling for default guidance to ensure people
receive support before accessing their pension pots, and are
pleased the Committee join us in recommending this”.
