Context
Prior to the publication of its full Financial Lives 2022 survey report, the FCA has provided selected statistics from its cost of living recontact survey (January 2023) to offer an insight into the financial situation UK adults experienced over the 6 months to January 2023.
The help people need to deal with the rising cost of living goes beyond financial services and the financial services industry has a vital role to play in supporting people during these challenging times. The FCA has set clear standards and expectations for how consumer credit, mortgage and insurance firms should help customers in financial difficulty, and it warns that it is taking assertive regulatory action where firms fail to meet those expectations. The findings highlight the continued importance of ensuring consumers get appropriate support when facing financial difficulty and ideally seek such support at an early stage.
Key points to note
The number of adults who missed payments on any domestic bills or meeting any of their credit commitments in 3 or more of the previous 6 months went up by 1.4 million: from 4.2 million (8%) in May 2022 to 5.6 million (11%) in January 2023, while the number of people who felt that making these kinds of payments was a heavy burden jumped from 7.8 million (15%) to 10.9 million (21%).
The survey also showed that 29% of UK adults with a mortgage and 34% of renters experienced payment increases in the 6 months to January 2023.
Of UK adults who were insurance or protection policyholders in May 2022, 8% cancelled one or more of their policies, and 7% reduced the level of cover on one or more their policies in the 6 months to January 2023, specifically to save money due to the rising cost of living. As some policyholders did both (cancelled and reduced cover), this means that 13% of May 2022 policyholders (or 6.2m people) cancelled and/or reduced cover.
The toll on mental wellbeing was considerable, with 28.4 million people being more anxious or stressed due to the rising cost of living. Some survey participants told us in their own words how the rising cost of living was affecting them. Within the main article, the FCA include some of these examples to demonstrate the impact on people’s lives.
The FCA also share positive stories of customers dealings with firms that reflect the FCA’s guidance, for example that consumers should contact their credit or mortgage lender if they are struggling with payments.
Next actions
None – for information and awareness.