Alliance and Leicester has rebutted claims by the National Consumer Council (NCC) that it should be doing more to encourage savers and financial planning, and less to encourage borrowing, after the bank released research showing that consumers intend to continue increasing their borrowing.
The NCC has added its weight to concerns that people are overstretching their finances and accumulating too much debt.
The NCC said that it was the banks, building societies and other finance companies that were responsible for encouraging people to borrow money, rather than encouraging financial planning and saving for the future.
The Alliance and Leicester Wealth Tracker Index found the average planned monthly borrowing for August was £87, excluding mortgages and household debt. This is 30% more than a year ago and 55% more than in 2001. People aged between 30 and 40 were the biggest debtors with £184 of planned monthly borrowing.
Frances Harrison, head of research policy and development, said in a letter to the Financial Times: ‘NCC would like to see finance companies, such as Alliance and Leicester, introducing a more responsible lending policy to make sure that customers can afford the repayments and understand the full costs of borrowing.’
Andy Homer, senior press manager at the Alliance and Leicester said: ‘We are probably one of the most prudent banks in the UK and do not see how the NCC could expect we would improve on that.
‘On the mortgage side we are, if anything, attacked for being too prudent ‘ we do not lend over 95% loan to value and our lending policy is fairly tight. The same can be said for our other lending.’