Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps she is taking to improve public awareness of and regulate high-cost credit.

Lenders offering high-cost credit are regulated by the Financial Conduct Authority (FCA). This oversight ensures that lending practices are fair and that consumers are protected.

In 2013 the Government placed a duty on the FCA to implement a price cap for high-cost short-term credit products. The price cap came into force in 2015 and ensures that consumers using these products will never repay more than 100% of the principal in interest, fees, and other charges.

Lenders are also required to follow the FCA’s rules on promotions and adverts, where non-compliance could lead to fines. The FCA requires that all adverts and other promotions must be clear, fair, and not misleading.

The Government is also taking steps to improve financial literacy and awareness across the population... As part of the Financial Inclusion Strategy, the Government announced plans to make financial education compulsory in primary schools in England through a new statutory requirement to teach citizenship, alongside a renewed emphasis on the subject in secondary schools in the subjects of mathematics and citizenship. These measures aim to equip young people with the knowledge and skills they need to navigate an increasingly complex financial landscape and make informed decisions throughout their lives.

More widely, the Financial Inclusion Strategy recognises the useful role of responsible credit in helping households manage their cashflow and meet unexpected costs. The Strategy includes measures to support people’s access to responsible credit, including support for community finance providers, like credit unions.