Martin Lewis backs legislation bid to combat spread of payday lenders
A new bill that will seek to dramatically improve financial education in Wales and give local authorities greater powers to tackle financial exclusion could be given the go-ahead by the National Assembly this Wednesday (October 16).
Bethan Jenkins AM, who has met with many constituents whose lives have been blighted by sky-high interest loans, as well as with organisations looking to halt their spread, will seek to convince her Assembly colleagues that legislation is needed to help people so that they are not heavily indebted for long periods.
If the South Wales West AM is given leave by the Assembly to take it forward, she is hoping that fellow Assembly Members from across the political spectrum, together with interested parties from outside of the Assembly, will add their own ideas to the Financial Education and Inclusion Bill, strengthening and improving what it will offer.
The Bill has been backed by Martin Lewis, creator of MoneySavingExpert.com, a well-known champion of financial education.
Martin Lewis said:
“I've been campaigning for years to ensure we educate our children to live in this competitive consumer economy - so it's great news that there's now a Bill being planned that looks to build upon compulsory financial education already offered in Wales. We need to ensure our children are equipped both to deal with dangers like payday loans, temptations like impulse spending, and planning a stable future for mortgages and, yes even one day, pensions.
“Wales was already one step ahead of England in introducing compulsory financial education. However, this Bill demonstrates that policy makers in Wales are not prepared to sit on their laurels and want to push it another step forward. Music to my ears.”
“In Wales, schools are already obliged to provide financial education. While these courses are well designed and diligently provided, my concern - from talking with both organisations and people with debt - is whether they can keep up with the pace of financial product innovation.
“For example, you could teach sixth formers now about the latest thing that banks are offering. However, when they come to making choices perhaps just a couple of years down the line, they could be faced with a whole array of new products that they don’t understand.
“To combat this, I believe we need to do two things. Firstly, we need to be embedding financial education far deeper in the curriculum, so that it becomes second nature to pupils and students. As well as using time in mathematics and numeracy lessons, it could be included in subjects such as English, and it would be there to help them better understand how finance is such a cross-cutting feature of modern life, that they need to recognize for what it is when it is put in front of them.
“Secondly, there is a lot of good work being done by local authorities – with third sector and charity support - in helping people with debt now. But they tell me of their frustration at only being able to go so far in combatting the high interest lenders, betting shops and cold callers that plague their tenants, and they would gladly welcome greater powers to take steps to stop this from happening.
“When I have debt management charities telling me that three in five people who go to see them with a loan they can’t afford to pay cannot even read their own bank balance sheet, I believe we as an Assembly just need to be doing a great deal more to end this. I see this bill as a way of opening up a far wider debate about debt management in our society, and believe that legislation that helps end the problems we are seeing will be all the better for everyone’s input.”
The Bill proposals have received significant backing from third sector organisations and charities, including Community Housing Cymru.
Clare James, CHC’s Housing Services Policy Officer, said:
“CHC supports the proposals for the FE Bill. Through our Your Benefits are Changing campaign, we know how important financial capability will be in helping people to understand Universal Credit, including managing their rent payments and budgeting with a different payment pattern.”