TISA response to the Centre for Policy Studies report on household debt for Generation Y
Responding to the Centre for Policy Studies report which warned that Generation Y could be the first generation to experience a worse quality of life than its parents, David Dalton-Brown, Director General, TISA, which has established the pan-financial services industry body, TSIP (the Savings and Investments Policy project) an unprecedented coalition of 50 financial services organisations, trade bodies and consumer groups said:
“This report highlights the scale of the household debt and the savings crisis facing the UK. It is staggering that UK household debt has now reached £221,000, this is unsustainable.
“The findings support our TSIP report, ‘Saving Our Financial Future’, which also show that living for today has taken priority over saving for tomorrow.
“Our report found that one-third of the UK has less than £250 in savings and 50% have less than £1,500, while only 45% of the workforce is saving towards retirement. There is a real danger that society’s appetite for consumption and debt will lead to a generational ‘tipping point’ in 2035, when a generation will retire less well-off than their parents. A situation not witnessed for almost 100 years.
“Saving for retirement is harder than ever before and Generation Y is faced with the dual problem of the cost of living crisis and with only having two years in work to save for every year in retirement. This used to be a ratio of three to one.
“However, all is not lost but it requires swift and coordinated action to make the UK into a society where it is as easy to save as it is to get into debt.
“We have outlined a number of ways to achieve this but in essence, the standard of financial education must be increased while guidance has to be made available to all; the actual process of saving must be made simpler and swifter through products such as the Digital Passport, which will empower savers; and it is critical that these improvements are accompanied by the creation of a Savings Minister who is responsible for promoting financial responsibility nationally.
“Saving is of benefit to everyone by ensuring growth, stability and prosperity for the country. The time to act is now.”
*The Savings and Investments Policy project is working with a wide range of financial service companies, trade bodies and consumer groups to develop these pan-industry proposals. It is directed by an Executive Committee formed of 16 leading financial services companies including Aviva, AXA Wealth, BNY Mellon, BlackRock, Ernst Young, Henderson, J.P. Morgan Asset Management, L&G, Lloyds Banking, Nationwide, Northern Trust, Old Mutual, the international law firm, Pinsent Masons, RBS, Threadneedle Investments and TISA.
Ends…
For further information please contact:
David Dalton-Brown, Director-General, TISA – Tel: 01642 666995
Email: TISA@newgatecomms.com
Issued on behalf of TISA by Newgate Communications
Alistair Kellie – Telephone: 020 7680 6558/Email Alistair.Kellie@newgatecomms.com
Nick Morris – Telephone: 020 7680 6557/Email Nick.Morris@newgatecomms.com
Notes for Editors
TISA is a not-for-profit membership association operating within the financial services industry. We represent the interests of over 147 member firms involved in the supply and distribution of savings and investment products and services.
TISA has a highly successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve the performance of the industry and the outcomes for consumers. Policy and regulation continues to be the major focus for our members with regard to corporate responsibility.
TISA and its members’ remit is evolving into a clearer focus on pro-active consultation in the regulatory world in order to influence policy and associated regulation before its creation, rather than reacting to issued policy directives. This will help to ensure a more considered policy creation from the authorities.