The Financial Conduct Authority (FCA) has found 7.8 million people are finding it a heavy burden to keep up with their bills, an increase of around 2.5 million people since 2020.
The FCA has published a snapshot of the latest edition of its landmark Financial Lives survey, which was carried out between February and June 2022.
One in four UK adults are in financial difficulty or could quickly find themselves in difficulty if they suffered a financial shock, and 4.2 million people have missed bills or loan payments in at least three of the six months before the survey took place.
The FCA has responded quickly to cost of living pressures, in line with its 3-year strategy to prevent serious harm and set higher standards. Earlier this year the watchdog reminded thousands of lenders how it expects them to support customers in financial difficulty and took action with more than 30 firms to make sure customers get the help they need.
Although the FCA does not yet regulate buy now pay later products, the regulator successfully engaged with providers to improve customers’ terms and conditions. The FCA also recently warned insurers to protect their customers from unnecessary add-ons and unfair penalties, and its upcoming Consumer Duty will set a higher level of consumer protection and require firms to put their customers’ needs first.
Sheldon Mills, Executive Director, Consumer and Competition said:
‘Our research shows that people up and down the country are struggling to keep up with their bills.
‘If you are facing financial difficulty, you don’t need to struggle alone. There is free debt advice available, and we have told firms that they must work with their customers to solve any problems with payment.’
The FCA continues to remind those in financial difficulty to contact their provider in the first instance to discuss their options, to shop around to find the best deal, and to use the MoneyHelper service for tips on living on a squeezed income and to find free, expert debt advice.
The survey also found that people living in the most deprived areas of the UK are nearly seven times as likely to be in financial difficulty compared to those living in the least deprived areas. It also found that 12% of people in the North East and 10% in the North West are in financial difficulty, while 6% of people in the South East and South West are in the same position.
The Financial Lives survey is the largest of its kind the UK, with more than more than 19,000 people interviewed between February and June 2022. The full findings will be published in early 2023.
7.8 million are finding it a heavy burden to keep up with their bills, up from 5.3m in 2020.
31.9 million people (60% of all UK adults) across the UK are finding it a heavy burden or somewhat of a burden to keep up with their bills, an increase of around 6 million people since 2020.
There has been an increase in people in financial difficulty, with 4.2 million people missing domestic bills or credit repayments in 3 or more of the last 6 months, up from 3.8 million in 2020.
12.9 million UK adults now have low financial resilience – 1 in 4 (24%) of all UK adults – and up more than 2 million on 2020 (10.7m). These are people who are in financial difficulty, or who could quickly find themselves in difficulty if they suffer a financial shock.
Adults living in the most deprived areas of the UK are nearly 7 times more likely to be in financial difficulty than those living in the least deprived areas; 27% of black people said they found it a heavy burden to keep up with bills, compared with 15% of all UK adults; 12% of people in the North East and 10% in the North West are in financial difficulty, compared with 6% in the South East and South West.