FCA publish Financial Lives January 2023
The Financial Conduct Authority (“FCA”) has published selected statistics from its Financial Lives cost of living (Jan 2023) survey. The survey was undertaken to give the regulator insight into the financial situation of adults living in the in the UK and their experiences during the second half of 2022.
The FCA conducted follow-up interviews with thousands of respondents of its Financial Lives 2022 survey. The follow-up survey provides a look into the financial health of those surveyed eight to nine months on from the initial research.
The survey details some important findings about the impact of the rising cost of living on their finances which the FCA have shared. The report found that;
- The number of adults who missed payments on any domestic bills or credit commitments in 3 or more of the previous 6 months went up to 5.6 million in January 2023. This was an increase of 1.4 million on May 2022.
- 9 million people felt that making these kinds of payments was a heavy burden. This was an increase of 3.1 million.
- 29% of UK adults with a mortgage and 34% of renters experienced payment increases in the 6 months to January 2023.
- Since May 2022 13% of UK adults who were insurance or protection policyholders cancelled or reduced the level of cover specifically to save money due to the rising cost of living.
- The survey also found that 1 in 2 UK adults, or 28.4 million people, were more anxious or stressed due to the rising cost of living.
In May the FCA reminded consumers that “help is available for those who need it” as it continues to respond to cost of living pressures in line with its strategy to prevent serious harm to consumers. The FCA has already taken actions to support consumers during the cost-of-living crisis by undertaking supervisory activity such as:
- Writing to 3,500 lenders and set out the regulator’s expectations of how they should be supporting borrowers in financial difficulty.
- Advised 32 lenders to make changes to improve the way they treat customers. Currently, 8 of these firms have voluntarily agreed to pay £29 million in compensation to over 80,000 customers.
- Enforced its rules around financial promotions leading to the amendment or removal of 8,582 misleading promotions during 2022. This is 14 times more than 2021.
- Secured changes to the terms and conditions of buy now pay later products, ahead of any regulation of the sector.
- Warned banks to improve the way they treat small business owners when collecting and recovering debts, and;
- Set out clear expectations on what mortgage lenders can do to help customers worried about payments.
The survey did show a spotlight on some good practises within the financial services industry with some consumers setting out how they were pleased with how they were treated when they contacted their lender. Some consumers arranged new payment plans to enable them to pay a reduced amount for a longer period and some were referred to not-for-profit debt advisers.
The full report detailing statistics collected during 2022 will be published later this year.
