Financial Counselling Australia, the peak body for financial counsellors, has called for the inclusion of a savings buffer in responsible lending requirements.The FCA has released a consultation paper, Everyone Needs a Savings Buffer, detailing a proposal to include a savings category in standard income and expenditure statements used be credit providers when assessing repayment capacity.Under the current responsible lending rules, credit providers must make reasonable inquiries about a consumer's financial situation and their requirements and objectives; they must take steps to verify the consumer's financial circumstances; and they must be satisfied that the credit contract is not unsuitable for the consumer.The FCA said: "At present the Standard Statement of Financial Position and most other income and expenditure forms used by creditors don't include a line item for savings, reflecting an expectation that after identifying a baseline level of income required by the debtor, any remaining income will be available to pay towards debt."The FCA proposal is that for the purposes of assessing repayment capacity, the income and expenditure assessment would include an allowance for the borrower to save a minimum amount of income.The FCA cited a recent development in the United Kingdom, where the Money Advice Service, a government agency, is piloting the addition of a savings component in its Standard Financial Statement, which is commonly used by credit providers.The savings component allows borrowers to allocate up to ten per cent of monthly income to savings before allocating income to living expenses and loan repayments.The FCA said the rationale for adding a savings component to responsible lending requirements was to give consumers, especially those on low incomes, scope to build a buffer against financial shocks and meet unexpected costs."Having a savings buffer is a key element in building financial resilience within households and enabling consumers to take control of their finance," the FCA said. The FCA has also called on financial institutions to help consumers set up savings accounts and deposit arrangements as part of the credit process.It recommends that the idea be applied initially to borrowers in financial hardship and then more broadly."In our view the inclusion of a savings buffer in assessing a consumer's capacity to repay a loan is a fundamental component of responsible lending," the FCA said.