Question to the HM Treasury:

To ask His Majesty's Government what financial advice or guidance a lending institution is required to give a person aged 21 years old or under before permitting them to take out a loan of more than £25,000.

Lenders offering credit are regulated by the Financial Conduct Authority (FCA). This oversight ensures that lending practices are fair and that consumers are protected – firms regulated by the FCA must comply with its strict lending affordability rules, lending only to those who can afford repayments based on a thorough assessment of their financial situation. 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 committed to ensuring that people can access the guidance they need to confidently understand and use financial products such as loans. The Money and Pensions Service (MaPS), an arm’s length body of the Government, provides free and impartial guidance on a range of financial topics, including credit. More widely, the Government is taking steps to improve financial literacy and better prepare young people for life’s key financial decisions. As part of the Financial Inclusion Strategy, the Government announced plans to make financial education compulsory in primary schools in England, alongside a renewed focus on financial education in secondary schools through the subjects of mathematics and citizenship. This will help build a generation better equipped to make informed financial decisions, including those related to the use of credit.