Britain’s accountants have sounded the alarm bells over what they see as dangerously high levels of debt across Britain.
In a new report, launched today, the Association of Chartered Certified Accountants (ACCA), said a “growing amount of evidence indicated [there was] a massive over-indebtedness by vulnerable groups in UK society”.
Unsurprisingly, students, the self-employed and those on low or irregular pay were said to be the most at-risk groups, as Helen Brand, ACCA chief executive outlined yesterday for City A.M.
“The increasing use of credit cards and the debt levels of vulnerable groups are of great concern and require immediate attention,” the report found.
Various indicators have all pointed to a slowdown in savings and a spike in borrowing since the financial crisis, according to the body. Research has shown that more than one-third of all households have no savings at all and two-fifths of all students have an overdraft - the average amount being £800.
After pensions are removed from the equation, the so-called “saving ratio” is actually in negative territory, meaning households are spending more than they are bringing home in disposable income.
The ACCA said fintech could solve part of the answer as it reduces the costs of banking by stripping out intermediaries and could see the rise of lending products such as social bonds.