Poverty appears to be becoming the norm in society with more families than ever forced into financial hardship by the rising price of essentials such as gas and electricity.
The Consumer Credit Counselling Service this week warned that 6.2 million UK households are financially vulnerable. Some 4.3 million households have no savings at all, so that losing a job or a massive increase in bills could push them into a debt spiral.
Financial Services Authority figures also suggest the number of homeowners in financial distress stands at 1.2 million, more than one in 10 of all mortgage holders.
Adding to the woes are figures from the Department of Energy and Climate Change showing that by 2009, 5.6 million households were in fuel poverty, where energy bills total a tenth or more of total household income. Analysts say things could get a lot worse with more fuel cost rises expected from energy providers.
The whole sorry mess means financial planning has never been more important and getting the right advice is crucial. But finding decent advice looks set to be more elusive than ever.
The financial industry has been working for years towards new rules, known as the Retail Distribution Review, designed to give consumers clearer advice. The new regime – which will include the scrapping of confusing commission charges – is due to be introduced at the end of next year, but a Treasury Select Committee has today called for it to be put back by 12 months.
This seems a nonsense. The industry has had long enough to plan for the changes. Delaying the new system will create confusion among consumers. I trust the Financial Services Authority will ignore the Treasury's proposal and continue to work towards introducing the new advice regime as soon as possible.Reuse content