Credit and Over-indebtedness
Following publication in 2003 of a White Paper - "Fair, Clear and Competitive - The Consumer Credit Market in the 21st Century", a fundemental review of the Consumer Credit Act took place and some changes have already been initiated.
A new Consumer Credit Bill was introduced into parliament in May 2005 and received Royal Assent in March 2006. The Department is now working on implementation of the Consumer Credit Act 2006.
The current Act (Consumer Credit Act 1974) regulates consumer credit and consumer hire agreements for amounts up to £25,000. The Act implements the European Directive on Consumer Credit, and this Directive is also under review.
Over-indebtedness
The term over-indebtedness is used to describe debt which has become a major burden for the borrower.
The Government is commited to reducing the social exclusion, financial exclusion and poverty that problem debt can cause and which can contribute to over-indebtedness.
Use to menu on the left or the links on the right to find pages dealing with other aspects of consumer finances.
Research on Debt
In conjunction with the Department of Work and Pensions, BERR recently jointly commissioned some research by the National Institute of Economic and Social Research (NIESR). This research uses an economic model to examine how households with different wealth and incomes can be expected to use debt (specifically unsecured debt) over their lifetime. The research was also used for a 'policy experiment' that examines the effect of a 4% rise in unemployment on privately-held debt. This research culminated in three reports - a non-technical summary paper, a main report and the policy experiment above - that are available via the link on the right hand side of this page.
E-Bulletin
Catch-up on all the latest consumer news from the Department by subscribing to our monthly E-Bulletin. Please click here and send us you first and last names and email address to be added to the circulation list.
(1115KB)