News
Consumers take time to reflect before taking out credit
New consumer credit lending fell by four percent in April 2011, according to figures released today by the Finance & Leasing Association, the trade body for the consumer credit industry.
The High Street continues to be the hardest hit as new purchases on store cards were down by 21% and new instalment credit taken out in shops was also down by 16%.
The decline in demand comes at a time when some parts of the credit market are already shrinking and the Government is drawing up plans for further changes to the way credit is regulated.
Fiona Hoyle, FLA Head of Consumer Finance, warns that the changes need to support the market, saying:
“Consumers are thinking very carefully before taking out credit and this is reflected in the fall in credit spending on the High Street. Over the last five years credit providers have introduced extensive new rights for consumer credit customers. Any further regulatory change must not inadvertently impede recovery in the retail sector.”
Table 1: New consumer credit lending, April 2011
| Apr 11 | % change on prev. year | 3 months to Apr 2011 | % change on prev. year | 12 months to Apr 2011 | % change on prev. year | |
| Total FLA consumer finance (£m) | 3,931 | -4 | 12,308 | -6 | 50,125 | -4 |
| Store cards (£m) | 136 | -21 | 374 | -22 | 1,893 | -22 |
| Credit cards (£m) | 2,420 | 0 | 7,122 | -4 | 29,988 | -5 |
| Store instalment credit (£m) | 178 | -16 | 574 | -16 | 2,620 | -7 |
| Second mortgages (£m) | 19 | -10 | 63 | -17 | 276 | -14 |
| Direct unsecured loans (£m) | 140 | -17 | 523 | -13 | 2,234 | -9 |
| Car finance (£m) | 954 | -8 | 3,429 | -3 | 12,223 | +3 |
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Note to editors:
In 2010 FLA members provided £69.8 billion of new finance to UK businesses and households. £50.2 billion of this was in the form of consumer credit, which was just under 30% of all unsecured lending in the UK. And £18.4 billion of it supported the purchase of new and used cars, including more than half of private new car registrations in 2010.
For further media information, please contact:
Russell Hamblin-Boone, FLA
T: 020 7420 9656 E: russell.hamblin-boone@fla.org.uk M: 07810 374110
Helen Saxon, FLA
T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993