Local MP Justin Tomlinson has spoken of how better financial education and reforms to the way in which lenders allow individuals to borrow money will lead to consumers getting a better deal, during two parliamentary debates on payday lending.
During the debates, Justin highlighted the importance of personal financial education and explained how equipping individuals with the skills to make informed decisions will provide consumers with greater financial security. Since becoming the MP for North Swindon in 2010, Justin has actively campaigned to include financial education in the curriculum and from September, students across England will learn about everything from checking change to calculating interest and understanding equity. As part of his work on payday lending and financial education, Justin has called on lenders to display interest payments and APR in cash-terms, so those borrowing money know exactly how much they will have to pay back.
In addition, the Financial Conduct Authority (FCA) has called for a levy to be imposed on the payday lending industry to pay for debt advice for the most-vulnerable borrowers. Justin has backed calls for such a levy, but called for the money to be ring-fenced for face-to-face debt advice to support those in the greatest need of financial assistance. In the most serious cases, individuals in financial distress have arrived at advice surgeries with carrier bags full of unopened bills. Whilst online debt advice via organisations including the Money Advice Service is welcome, it cannot effectively assist individuals in the most challenging circumstances, where only face-to-face support can work.
Justin is part of an influential, cross-party group which has worked with the Citizens Advice Bureau, debt advice groups including Stepchange and government ministers to help reform payday lending so it works more effectively for those who us it. The group has drawn-up a charter, more information about which can be found here.
Justin Tomlinson MP said: "There are a number of ways we can improve how institutions lend to those who need financial support, but top of that list must be educating people properly about personal finance. From September, financial education will be a part of the curriculum, allowing young people to equipped with the knowledge they need for the real world. For those already in need of support, I'm pleased that the FCA is looking to lenders to provide better debt advice and I will continue to push for money raised from a levy to be focused on face-to-face advice for the most complex cases".
Justin's speeches on 'Payday Lending' and 'The Debt Advice Levy' can be found here
