Up to half of UK adults show signs of financial vulnerability
These might include a lack of internet access or an overdraft, so their finances would be at an increased risk if something went wrong. This vulnerability is particularly evident among those aged 75 and over: 69% for the 75s and over, and 77% for the 85s and over. Women account for a larger percentage than men.
Among the key findings were:
- Single parents aged 18-34 are three times as likely to use high-cost loans: 17% compared to the UK average of 6%
- 13% of 25-34 year olds are considered ‘in difficulty’, because they have missed paying domestic bills or meeting credit commitments in three or more of the last six months
- Just 35% of those aged 45-54 have given a great deal of thought as to how they will manage in retirement
- Those aged 65 and over are least likely to check if an internet site is secure before giving their bank or credit card details.
The survey found that an estimated 4.1 million people have failed to pay bills in three or more of the last six months.
It showed that 15 million people are vulnerable to a bill shock, and eight million were struggling with debt. One in six (17%) of those with a mortgage or who are paying rent said they would struggle if monthly payments rose by less than £50.
This demonstrates that some households may see real difficulties if the Bank of England were to raise interest rates, as has been suggested.
The survey also highlighted real disparities between different age groups: 18-24 year olds are least satisfied with their financial circumstances with 60% having ‘low satisfaction’. Satisfaction only notably increases from the age of 55: just 21% of those 75 and over have low satisfaction.
The findings will inform the FCA’s investigation into consumer credit.
Justin Urquhart Stewart, Co Founder and Head of Corporate Development, 7IM said: “To the sound of creaking gates slamming shut behind me, I am shaken, but not really surprised, by the FCA’s survey findings. Here is the evidence of the woeful lack of financial education in the UK.
“We are all taught at school how to play the recorder. Why are we not taught about credit card balances, loan repayments, which bills to pay first, protecting your family and saving for your retirement? These are the areas that really matter and can stop people sleeping at night, not the recorder finger movements of Greensleeves. Financial education in schools and universities is crucial, but we would also like to see this done on a broader basis to employees and members of the public.”