New Coalition Government announces its financial policy plans

Following the OFT’s defeat in attempting to regulate bank charges last year , the new government intends to end unfair bank and other financial charges. It also intends to

• ban excessive interest rates on credit and store cards.
• give homeowners more protection against "aggressive" bailiffs.
• tell Courts that repossessions must always be a last resort.
• give people taking out a store card for the first time a seven-day cooling off period.

In respect of consumer advice and debt, the free national financial advice service announced in March under the previous government will go ahead but will now be funded by the financial services industry and not by the government and the FSA as planned by Labour.

The Ministry of Justice were already looking at setting a minimum level of debt before a court order could be obtained allowing creditors to seize and sell the homes of borrowers who have unsecured debts but the new government says that now, creditors will no longer be able to get a court order for the sale of properties where the unsecured debt is below £25,000.

On the pensions front the new government wants to give people flexibility to be able to draw on their pension pot before retirement and wants to simplify pension rules and regulations in order to reinvigorate company schemes This could include relaxing rules about offering spouses pensions and some form of index-linking, and making final-salary schemes less expensive for companies to fund.

Debtwizard comment 

I would like to see the new Coalition Government consider the following;

More protection from debt collectors and lenders for consumers who are in debt. Upon notification from any appropriately licensed debt management company or debt adviser, including debt charities, that the debtor is seeking advice on their debts then no action can be taken for a period of two months from the date of notification. This will enable a way forward to be planned, which in the long term will benefit the lender as there will be no recovery and tracing costs.

To ensure high standards and a quality service I’d like to see a requirement, similar to that in place for mortgage selling, for debt advisers to be professionally qualified.

Effective self-regulation of the debt management industry under the beady eye of the Office of Fair Trading or similar body, or full regulation.

Statutory debt management plans offering borrowers protection from unsupporting creditors or debt recovery agents with interest and other charges frozen and in certain circumstances debt relief on these plans.

The re-introduction of Simplified Individual Voluntary Arrangements (SIVAs), which will replace the current IVA where 75% of the lenders have to agree to it, to being based on a simple majority.

I applaud the decision not to allow an order of sale on a consumer's property for unsecured debts below £25,000.