Andrew Bailey, Chief Executive of the Financial Conduct Authority (FCA) has urged the Government to step in to help tackle the mountain of debt being racked up by the most vulnerable consumers in Britain. He has delivered this warning as new data shows that personal debt burdens are continuing to rise.

Recent figures, seen by the Guardian newspaper, show worsening consequences of Britain’s credit binge. It states that, according to the Money Advice Service, there are now 8.3 million people in the UK with problem debts.

This seems to be disproportionately affecting the most vulnerable people in Britain. For example, Andrew Bailey pinpointed gig economy workers, who do not have guaranteed hours, as in special need to take on more debt from credit to smooth their income.

StepChange has also highlighted the fact that young people and renters are increasingly vulnerable to suffer debt problems. It states many need to borrow and go into debt to cover the most basic everyday bills.

Bailey told the Guardian he had visited debt charities across the UK and that they reported that many people were facing difficulties with “frontline” debt such as Council Tax and utility bill arrears and missed payments.  He went on to state that organisations extending that kind of credit were often faster to recoup their losses, which can involve bailiffs, Court Orders and repossessions.

Consumer credit, which covers personal loans, credit cards and borrowing for cars, is rising at just under 10% a year. This is at a time when wages are falling by 0.4% a year, taking inflation into account.

Bailey states that Government involvement and action is needed and more information needs to be collected in relation to debts resulting from credit cards, car loans and other forms of lending such as rent to own.

The Bank of England has recently warned that interest rates could rise and this could compound matters as there are concerns that heavily indebted consumers could start to run into more difficulty on loan payments due to higher interest that needs to be paid.

The FCA’s research shows that 1 in 6 people with debts on credit cards, personal lending and car loans (which accounts for 2.2 million people) are in financial distress. They are likely to be younger, have children, be unemployed and be less educated than others. The FCA has already cracked down on pay day lenders but there is a view now that a review into the car loan market needs to be conducted.

If you are struggling with debt and would like to speak to a specialists solicitor about managing your debts or filing for bankruptcy, please call Farleys Solicitors on 0845 287 0939 or submit your enquiry online.