3.1m more borrowers struggling to meet repayments: FCA

The number of people struggling to meet bills and credit repayments has risen by 3.1m over the past 12 months, according to the latest data from the FCA.

10.9m people in the UK are now struggling to make repayments, compared to 7.8m in May 2022.

The number of adults who missed bills or loan payments in at least three of the last six months has also gone up by 1.4 million, from 4.2 million to 5.6 million over the same period.

FCA research also found that the cost of living is having an impact on people’s mental wellbeing. Around half of UK adults, or 28.4 million people, in January 2023 felt more anxious or stressed due to the rising cost of living than six months earlier.

The regulator recently reminded 3,500 lenders of how they should be supporting borrowers in financial difficulty and told 32 lenders to make changes to the way they treat customers. This work has led to £29 million in compensation being secured for over 80,000 customers.

Sheldon Mills, executive director of consumers and competition at the FCA, said: "Our research highlights the real impact the rising cost of living is having on people’s ability to keep up with their bills, although we are pleased to see that people have been accessing help and advice.

"We will continue to act quickly to make sure financial firms help their customers who are facing financial difficulty or are worried they might be soon."

Bernie Hickman, CEO at Legal & General Retail, commented: “New data released today by the FCA has found that the number of people struggling to meet bills and credit repayments has risen by 3.1m since May 2022.

“Household costs have increased significantly, and this had made people across the country especially vulnerable to financial shocks should the worst happen and facing struggles to meet their regular monthly payments. Legal & General’s latest Deadline to Breadline report that found UK households’ financial resilience has shrunk by 21% since 2020 (from 24 days to 19 days) – with the average working household working only 19 days from the breadline in the event it lost its income."

Karen Noye, mortgage expert at Quilter, added: "This should come as no surprise as increases in interest rates have pushed mortgage bills and the costs of other forms of debt much higher than people have been used to. While the pandemic no doubt caused many financial shocks, particularly for the self-employed, the cost of living crisis arguably has played a much greater role in damaging people’s financial wellbeing. The convergence of higher living costs and higher interest rates has pushed people’s finances right to the edge and sometimes over. This is having a huge impact on our mental wellbeing with the FCA finding that around half of the UK are more stressed or anxious about money."