The government is launching an initiative to focus on making Britain a nation of savers by 2030 and cutting the number of households relying on credit cards for everyday spending.
Studies report that 11.5 million people have less than £100 saved as emergency funds, often having to rely on credit to cover unexpected costs and everyday living expenses. In light of this, the government is setting up a plan to improve the situation over a ten-year period that will see an extra 2 million people saving and 2 million fewer relying on credit cards by 2030.
Although not all credit card spending is bad, providing you have the reserves to cover the debt and as interest rates are currently so low, it may be that the money works harder and better for you if it was invested than it would if you used it to clear your credit card debt. Everyone’s individual circumstances are different and advice should be sought on what is best for you, but relying on credit cards for everyday expenses with no back up is less than ideal.
The initiative will also focus on education in schools about finances and how they apply to the real world, as well as debt advice to adults who may be struggling.
This plan fills the gap left by the Money Advice Service, which was scrapped in 2016 and which had a similar enterprise in the pipeline that never came to fruition. Let’s hope this endeavour has more success.
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