The FSA told the Daily Mail that people’s “live for today” approach is having a negative effect on their personal finances, which could prove disastrous if the UK economy takes a downturn.
According to the watchdog, a million adults are now falling behind with their bills and credit card payments on a regular basis, while another two million are “constantly struggling”.
A spokesman for the FSA told the newspaper: “Record debt levels and rising interest rates have heightened concerns that some consumers have unsustainable levels of debt, which could lead to an increase in the number of consumers facing debt-repayment problems.
“Fewer consumers now believe in the value of saving, and many consumers, particularly younger age groups, have a ‘live for today’ attitude.”
The FSA also said that lenders must be more conscientious and warned that their reputations could deteriorate if they are seen, in retrospect, to have behaved irresponsibly.
It has been calculated that consumers in the UK carry around £1.25 trillion in total personal debt and many experts are expecting the number of individual voluntary arrangements and bankruptcies to rise this year.