The FCA has published its latest Financial Lives Survey which looks at consumers’ financial situations, including the products they choose, and their experiences engaging with firms.
The FCA conducted its research in February 2020 and ran an extra survey in October to understand the impact of the Covid-19 pandemic.
The October survey’s main findings are:
- There are now 27.7 million adults in the UK with characteristics of vulnerability, such as low financial resilience, poor health or recent negative live events. This is an increase from 24m people in February.
- Over the course of 2020, the number of adults with low financial resilience (meaning over-indebtedness or with low levels of savings or low/erratic earnings) increased from 10.7 million to 14.2 million
- 1 in 3 adults (33% or 17.5m) are expecting to cut back on essentials and 8.1 million (16%) expect to take on more debt.
The impact is not being shared equally, with a higher than average proportion of younger and BAME adults becoming vulnerable since March.
The report also reveals the impact of emergency measures: four in ten (40%) mortgage holders who took up payment deferrals said they would have struggled a lot without such measures.
Carl Packman, Head of Corporate Engagement, said:
“The findings of the FCA’s research show that we are still waiting for a long-term solution to protect people from unaffordable debt and the poverty premium.
“Increasing access to affordable credit, including no-interest loans, is just one way to help people avoid personal financial crisis.”