The FCA has announced the results of the latest round of its Financial Lives survey (FLS) which looks at the financial resilience of the UK population at large.
The survey looks at consumers’ financial situations, the financial products they choose and their experiences of engaging with financial services firms.
The FCA concluded an initial round of FLS research in February last year. It then conducted an additional survey in October to gauge the impact of Covid-19 (and measures introduced to control it) on the financial position of UK consumers.
The October survey found 27.7 million adults in the UK with characteristics of vulnerability such as poor health, low financial resilience or recent negative life events. Any one of these characteristics puts consumers are at greater risk of harm.
October’s figure is up 15% on the 24 million identified as showing signs of vulnerability in February. One in three adults (15.9m) said they expected their household income to fall over the coming six months, and one in four (13.2m) expected to struggle to make ends meet.
The FCA describes the report’s findings as ‘worrying’. FCA Director of Consumer and Retail Policy Nisha Arora notes that ‘Since the start of the pandemic, the number of people experiencing low financial resilience or negative life events has grown. The pain is not being shared equally, with a higher than average proportion of younger and BAME adults becoming vulnerable since March. It is likely the picture will have got worse since we conducted the survey.
‘Vulnerability remains a key focus for the FCA,’ Arora adds, ‘and 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.’
To read the full report, click here.
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