News & Views

The FCA’s affordability rules have been in force since 2018. So why are lenders still lending to households who can’t afford the essentials?

‘Financial inclusion’ should help people withstand financial shocks, not deepen them. Yet the current agenda focuses overwhelmingly on increasing access to credit per se, rather than on credit that people can genuinely afford.

Dr Ana Rita Pena looks at the emerging direction of the Warm Homes Fund following the Government’s recent call for evidence. To work for lower-to-middle income households, Innovative Finance models need to reduce risk, build in trusted advice, and connect to wider delivery models such as property-linked finance and neighbourhood-based schemes.

In our response to the FCA’s consultation on credit advertising, we warn against proposals to weaken representative APR rules and cost disclosure protections.