Six in 10 UK adults struggling to keep up with bills – City regulator
Around 31.9 million people, or 60% of UK adults, were estimated to be finding it a heavy burden or somewhat of a burden, FCA research found.
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Your support makes all the difference.Nearly eight million people were already finding it a heavy burden to keep up with their bills before this autumn, according to research from the City regulator.
The Financial Conduct Authority (FCA) estimated that 7.8 million people were struggling to keep up with their bills – an increase of around 2.5 million people since 2020 – when around 5.3 million people were finding it tough.
In total, 31.9 million people, or 60% of UK adults, were estimated to be finding it a heavy burden or somewhat of a burden keeping up with bills – an increase of around six million people since 2020.
The findings are part of the FCA’s Financial Lives survey, with the latest research having been carried out among 19,000 people between February and June 2022. The full findings will be published in early 2023.
One in four UK adults was in financial difficulty or said they could quickly find themselves in difficulty if they suffered a financial shock, and 4.2 million people had missed bills or loan payments in at least three of the six months before the survey took place, the FCA found.
Some 12.9 million UK adults, or around one in four (24%), were thought to have low financial resilience.
These are people who are in financial difficulty, or who could quickly find themselves in difficulty if they suffered a financial shock.
Adults living in the most deprived areas of the UK were nearly seven times more likely to be in financial difficulty than those living in the least deprived areas, the FCA said.
The research also found that 27% of black people said they found it a heavy burden to keep up with bills, which was significantly higher than 15% of UK adults generally.
Around 12% of people in the North East and 10% in the North West of England were found to be in financial difficulty, compared with 6% in the South East and South West.
Sheldon Mills, executive director, consumer and competition at the FCA, 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.”
Figures released earlier this week show inflation has returned to the 40-year high it hit earlier this summer after food prices soared.
The Office for National Statistics (ONS) said Consumer Prices Index inflation reached 10.1% in September, compared with 9.9% in August.
Food prices jumped by 14.5% compared with a year earlier, representing the largest annual rise since 1980, while housing and utilities costs leapt by 20.2%.
Households are facing a tough winter ahead, with the energy price guarantee, which limits the unit cost of energy, set to last until next April. A Treasury-led review will be launched to consider how to support households with energy bills from April 2023.
If you are facing financial difficulty, you don't need to struggle alone
The FCA said its response to cost-of-living pressures is in line with its three-year strategy to prevent serious harm and set higher standards.
Earlier this year, the watchdog reminded thousands of lenders that it expects them to support customers in financial difficulty.
Although the FCA does not yet regulate buy now pay later (BNPL) products, it said it has successfully engaged with providers to improve customers’ terms and conditions.
It also recently warned insurers to protect their customers from unnecessary add-ons and unfair penalties, and its forthcoming consumer duty will set a higher level of consumer protection, requiring firms to put customers’ needs first.
The regulator is also reminding people 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.