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Poorer families get advice on mortgages

Date: 26 Jan 05

Poorer families could soon be offered advice on mortgages and other financial products.

A report out this week warned that increased education would help consumers avoid debt traps and commonly used buyback schemes and cheque cashing services.

Author of the report, Paul Jones, said: "Our research shows that many people on low incomes rely on word-of-mouth advice from family and friends, which can be inaccurate."

He added: "By training people in the local community with basic knowledge of financial services, we can hopefully eliminate the myths that often exist."

Citizens Advice director of policy, Teresa Perchard, pointed out: "Reform of the consumer credit laws and the new financial inclusion fund are essential steps in trying to make sure that people on low incomes can avoid being ensnared by extortionate credit deals and unmanageable debt."

Financial secretary to the Treasury, Steven Timms, welcomed the report's findings and stated that the government was working to improve the situation.

"The government is committed to tackling financial and social exclusion, for example, through the creation of the Financial Inclusion Taskforce and a £120 million Financial Inclusion Fund," he said.

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