The FCA have published the latest Financial Lives survey, looking at consumers’ financial situations, the financial products they choose and their experiences of engaging with financial services firms.
The FCA concluded its research in February 2020. The regulatory then ran an extra survey in October 2020 in order to understand the impact of the Covid-19 pandemic on the financial situation of consumers.
The October survey found that there are now 27.7 million adults in the UK with characteristics of vulnerability such as poor health, low financial resilience or recent negative life events. Having any one of these characteristics means that these consumers are potentially at greater risk of harm. This 15% rise since the FCA completed its initial survey in at the start of 2020.
Commenting on the findings, Nisha Arora, Director of Consumer and Retail Policy at the FCA said:
‘Vulnerability remains a key focus for the FCA, and has been brought into sharp relief by the pandemic. We continue to work with the wider financial services sector, including businesses, regulators and government to support and protect consumers. We expect to finalise our guidance on how firms should treat vulnerable customers shortly.’
The FCA found that there has been an number of consumers with low financial resilience – meaning over-indebtedness or with low levels of savings or low or erratic earnings. Over the course of 2020, the number of UK adults with low financial resilience increased from 10.7 million to 14.2 million.
The FCA surveyed more than 16,000 people between August 2019 and February 2020. and a further 22,000 respondents in October.
You can read the full findings here.