A growing number of UK adults are facing difficulties with bills and credit repayments, with an estimated three million more people struggling compared to the previous

year, according to the Financial Conduct Authority (FCA). The City regulator reported that by January 2023, around 21% of adults, equivalent to 10.9 million individuals, found bills and credit commitments to be a heavy burden, representing an increase of 3.1 million from May 2022 when the figure stood at around 15% or 7.8 million.

Additionally, the FCA estimates that the number of adults who missed bills or loan payments for at least three out of the past six months has risen by 1.4 million, reaching 5.6 million (11%) in January 2023 compared to 4.2 million (8%) in May 2022.

These findings were based on a UK-wide survey conducted by the regulator, which collected responses from over 5,000 adults aged 18 and above.

The research also revealed that 29% of adults with mortgages and 34% of renters experienced payment increases in the six months leading up to January 2023. As a result of the financial strain, some individuals have resorted to reducing their insurance coverage to alleviate general living cost pressures, which could potentially leave them vulnerable in case of emergencies or unforeseen events.

Specifically, 8% of respondents who held insurance and protection policies in spring 2022 had cancelled one or more policies, while 7% had reduced their coverage to save money amidst rising living costs in the six-month period up to January 2023. A combined total of approximately 6.2 million adults (13%) had either cancelled or reduced their insurance cover during this time.

The FCA is reminding borrowers that they can seek assistance from their lenders if they are struggling to meet their payment obligations. The regulator has consistently emphasized the importance of firms supporting their customers and working together to address payment difficulties. It has communicated its expectations to industry leaders through written correspondence and has urged lenders to make necessary changes to better serve their customers.

To manage debt or gain further insight into financial management, individuals can access free expert advice and support services.

The FCA has reached out to 3,500 lenders, outlining guidelines on how they should assist borrowers facing financial hardship, and has issued directives to 32 lenders to modify their customer treatment practices. Photo by PPP, Wikimedia commons.