Number of struggling borrowers jumps by three million in just one year
The number of people struggling to meet bill and credit repayments has risen to 10.9 million, up by 3.1 million from the number registered a year ago, according to the Financial Conduct Authority (FCA).
Back in May 2022, 7.8 million people were having issues with their repayments, the regulator said.
The FCA reported that the number of people who had missed payments on bills or loans in at least three of the last six months had jumped by 1.4 million to 5.6 million over the same period.
Perhaps unsurprisingly, these financial pressures are having an impact on mental health. The FCA found that around half of adults in the UK ‒ equivalent to 28.4 million people ‒ felt more stressed or anxious due to the rising cost of living than six months earlier.
The regulator emphasised that financial firms have been reminded of their responsibilities in helping support those encountering money problems. It noted that 3,500 lenders had been told how they should support borrowers in financial difficulty, with 32 lenders ordered to make changes to the way they work.
This had led to £29 million of compensation being secured for over 80,000 borrowers.
Help is there if you need it
Sheldon Mills, executive director of consumers and competition, said that the rising cost of living was having a “real impact” on people’s ability to keep up with their bills.
He added: “If you’re concerned about your finances, you do not need to worry alone. We’ve told lenders that they should provide support tailored to your needs. And, if you find yourself in debt or want to know more about how to manage your finances, free expert advice is available.”
Mills also emphasised that the regulator will continue to act to ensure financial firms help clients in financial difficulty, or who are worried they might be soon.
The FCA’s findings come after research from Which?, which found that two million households missed or defaulted on at least one bill payment in April. Of that number, around 700,000 missed a mortgage or rent payment.
The StepChange Debt Charity has also reported a stark jump in requests for advice around dealing with debts from consumers, with what the charity called an “escalating debt crisis”.