The OBR’s forecast relies on households saving less so they can keep spending, but with little in the bank, most will have to borrow instead. Our measure of household debt burdens shows that this leaves households little to spare. Plausible shocks could push debt stress back to the levels seen before the financial crisis.

‘Financial inclusion’ should help people withstand financial shocks, not deepen them. Yet the current agenda focuses overwhelmingly on increasing access to credit per se, rather than on credit that people can genuinely afford.

Even before the Covid 19 pandemic 7.2 million people (fourteen percent of the population) were heavily burdened by debt. It’s time to write down the debt.