Julian Knight: Drop in storecard use proves public is credit savvy

Latest figures show that consumers have had their fill of retailers' 30% interest rates

There is an attitude in this country that consumers are perennial victims, unable to make correct decisions and forever being hoodwinked by clever marketeers. Take the select committee discussions on payday lending, for instance, which possessed no understanding of the fundamental point that if there wasn't a demand for short-term lending it wouldn't exist.

The public is not as dense as painted by politicians and some commentators. Take the recent consumer credit figures from the Finance and Leasing Association. It shows some heartening stuff for those who, like me, generally think the British public gets many of its choices about right – in the long term at least.

Granted, consumers are not paying back debts as quickly as we should – considering the relatively low mortgage rate – but at least we're not racking up huge new borrowings.

But, for me, one of the most encouraging signs from the credit market is the decline of the storecard. Debt on these is down 12 per cent year on year. Set against personal loans, credit cards and car finance this sector is negligible, but it seems, finally, that high rates – over 30 per cent annual rate is the norm – lack of flexibility and the more general move away from the high street are sending storecards into retreat and perhaps even terminal decline. No bad thing at all.

Societies in flux

Coinciding with the Building Society Association shindig in Manchester, Deloittes said it thought that the mutual sector was seeing a "revival".

The raw figures seem to support the analysis with both lending and savings balances up. But the sector itself has been subject to a host of mergers in the past year with the big beasts swallowing up their medium sized brethren. We now have three big players – Nationwide (as ever), the Co-op and Yorkshire – with a couple of medium-sized societies hanging on. But for how long?

We could end up with three super-mutuals, banks in all but name, and a smattering of tiny societies serving local often non-metropolitan communities – little more than souped-up credit unions.

It's ironic that a banking crisis has led to greater changes in the number of players in the building society sector. This is hardly a sector seeing a "revival" more still in a state of flux.

Indirect tax sham

If you wanted more evidence that our tax system favours the rich, it came via Bloomsbury Professional this week.

Its analysis shows that since the financial crisis the percentage of government revenue from indirect taxes has soared on the back of VAT and "sin" tax increases. The fact is that indirect tax rises proportionately hurts those on middle to low incomes the hardest as they spend more of their earnings.

The great confidence trick that is being played by all three major parties is not to touch the sacrosanct basic rate of income tax at 20p and to fund this we have the indirect tax hike and the putative freezing of the 40p rate band – which crushes the initiative of many middle to above average income people to work extra and earn more.

Who escapes? Well it's those who were above the 40p tax rate when this financial crisis started but below the new 50p top rate of tax or those who can afford a good accountant.

Support Jeff and Brathay

Just a quick shout out for fellow financial journalist Jeff Prestridge who is running a staggering 10 marathons in 10 days in the Lake District as I write, in aid of the Brathay trust which helps vulnerable and disadvantaged kids. It's a truly staggering undertaking, so if you can give something please do at justgiving.com/jeff-prestridge It is a great cause.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Day In a Page

    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee
    World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

    Max Brooks honours Harlem Hellfighters

    The author talks about race, legacy and his Will Smith film option to Tim Walker
    Why the league system no longer measures up

    League system no longer measures up

    Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
    Valentine's Day cards: 5 best online card shops

    Don't leave it to the petrol station: The best online card shops for Valentine's Day

    Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
    Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

    Devil in blue Costa is a reminder of what Liverpool have lost

    The Reds are desperately missing Luis Suarez, says Ian Herbert
    Ashley Giles: 'I'll watch England – but not as a fan'

    Ashley Giles: 'I'll watch England – but not as a fan'

    Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
    Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

    Greece elections

    In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
    Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

    Holocaust Memorial Day

    Nazi victims remembered as spectre of prejudice reappears over Europe
    Fortitude and the Arctic attraction: Our fascination with the last great wilderness

    Magnetic north

    The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness