Commenting on the proposed regulation of Buy Now Pay Later products, and the debt advice and affordable credit recommendations of the Woolard Review into the unsecured credit market today, Caroline Siarkiewicz, Chief Executive of the Money and Pensions Service said: “The proposals to bring Buy Now Pay Later under regulatory scrutiny would provide further protection for people to avoid the potentially harmful consequences of this form of borrowing which can result in people spiralling into debt. This has come at a crucial time as many people face increased financial pressures as a result of the Covid-19 pandemic. I urge anyone who is worried or struggling to keep up with bills or financial commitments to speak to our Money Advice Service for free, confidential support. You can also use the debt advice locator tool on our website. Our research shows three quarters of people who seek help feel more in control after getting debt advice.”
“We also welcome many of the proposals in the report that reflect our focus, through the UK Strategy for Financial Wellbeing, on reducing the use of credit for everyday expenses and increasing the provision of free, expert debt advice.
“As the largest single funder of debt advice in England we will continue to work closely with the FCA and Government to help people who struggling with debt to get the right support for their circumstances. We forecast demand for debt advice to increase over the coming 12 to 18 months as a result of the pandemic.
“Access to affordable credit can be a lifeline for people in financial difficulty, but more work needs to be done to avoid repeat lending of high-cost credit products which may not be appropriate for people’s individual circumstances. Employer Salary Advance Schemes can also play an important role in offering low-cost alternatives to credit; and we welcome the proposal for a voluntary code of conduct to protect employees against any risks.
“Recommendations from our Challenge Groups will be published in Spring 2021.”