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Nearly 25% of Brits are on the verge of financial difficulty, FCA warns
Since 2020 an extra 2.2 million people in the UK have slipped into low financial resilience.
Concerns about the UK’s declining household finances are nothing new, but this morning the Financial Conduct Authority (FCA) published data from its latest Financial Lives survey which casts light on what’s really happening.
The FCA found 7.8 million people are finding the regular repaying of bills a “heavy burden”, up from 5.3 million in early 2020 when the last survey was conducted.
Meanwhile, 12.9 million UK adults (24 per cent) are classified as having “low financial resilience”, meaning that they are either already missed a bill payment or have little capacity to withstand a financial shock (like losing their main source of income for even a week).
The UK population classified in this “low financial resilience” bracket has increased by 2.2 million since 2020 when just 20 per cent of UK adults (10.7 million) were in the category.
“Our research shows that people up and down the country are struggling to keep up with their bills,” said Sheldon Mills, executive director of consumer and competition at the FCA.
Interestingly, although the number of UK adults on the verge of financial difficulty is higher than it was in 2020 or 2017 when the FCA last conducted its survey, those actually in difficulty has yet to increase
Some 4.2 million people reported regularly missing domestic bills and credit commitments in three or more of the last six months, only up slightly from the 3.8 million people who were in that situation in 2020.
The FCA pointed to the savings built up during the pandemic which has likely delayed the impact and onset of financial difficulty for many.
“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,” added Mills.
The FCA’sFinancial Lives survey is the largest study of its type, involving more than 19,000 interviews which were conducted between February and June 2022.
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