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Over Indebtedness

The Government is committed to social justice and prosperity for all. Over-indebtedness presents a barrier to delivery of objectives across Government, from tackling child poverty and social exclusion, to reducing barriers to work, and encouraging appropriate saving and investment

There is much going on across Government to tackle over-indebtedness. This all supports the overall strategy of (i) helping people to avoid becoming over-indebted and (ii) providing support for those who do. This comprehensive complementary activity is detailed in the Annual Reports that update the cross-departmental over-indebtedness Action Plan, that was issued in 2004. Activities are further detailed individually on Government departments' websites.

Monitoring papers are also produced which assess the drivers and levels of problem debt. The latest Monitoring Paper (Household Debt Monitoring Paper H2 2006) is the first of a new series of six-monthly updates and covers changes taking place in both Q3 and Q4 2006. The name has been changed from Over-indebtedness Monitoring Paper to better reflect the content of the document, although the coverage remains the same.

Current consultation

This consultation sought views on the extent to which non-consensual credit data could be shared by lenders, subject to appropriate safeguards, in order to enable lenders to make better, more responsible, lending decisions.

The Government is keen to promote responsible lending in the credit market as part of its strategy to minimise over-indebtedness. One aspect of responsible lending concerns the making of lending decisions. Lenders are encouraged, wherever practicable, to consider the full extent of a consumer’s credit commitments when deciding whether or not to lend to that individual. This is usually achieved through the sharing of credit data via Credit Reference Agencies.