The Financial Conduct Authority (FCA) has found 7.8 million people are finding it a heavy burden to keep up with their bills. This is an increase of around 2.5 million people since 2020.
According to a snapshot of FCA’s next landmark Financial Lives survey, one in four UK adults are in financial difficulty or could quickly find themselves in difficulty if they suffered a financial shock.
Moreover, 4.2 million people have missed bills or loan payments in at least three of the six months before the survey took place.
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 revealed that 12% of people in the North East and 10% in the North West are in financial difficulty. In comparison, 6% of people in the South East and South West are in the same position.
FCA executive director, consumer and competition Sheldon Mills 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 encourages those in financial difficulty to contact their provider in the first instance to discuss their options.
The regulator also recommends 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 regulator does not regulate buy now pay later products but has 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.
It also expects that the upcoming Consumer Duty will set a higher level of consumer protection and require firms to put their customers’ needs first.
The regulator also recently warned savers to beware of scammers as thousands withdraw pension savings to cover the rising cost of living.
Research by the FCA found that a quarter of savers would consider withdrawing money from their pension earlier. Moreover, 44% would take up the offer of a free pension review, one of the classic methods of scammers.
The full findings of the Financial Lives survey will be published in early 2023.
