More than half of British adults are finding soaring bills a burden, a survey on the nation's personal finances has found. About 31.9 million people, or 60% of UK adults, are estimated to be finding keeping up with the bills a heavy burden or somewhat of a burden.
According to research from the Financial Conduct Authority, eight million people were already finding it a heavy burden before this autumn. That is an increase of 2.5 million people since 2020 – when around 5.3 million people were finding it very tough.
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 had missed paying bills or making 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. And almost double the proportion of black people found bills a heavy burden than UK adults generally, 27% compared with 15 per cent.
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 next year.
The FCA reminded thousands of lenders earlier this year 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, and to shop around to find the best deal. They also recommend the MoneyHelper service for tips on living on a squeezed income and to find free, expert debt advice.
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