You are here: Home - Household Bills - News -

Up to half of UK adults show signs of financial vulnerability

0
Written by:
18/10/2017
As many as half of UK adults display one or more characteristics of financial vulnerability, according to a new survey of 13,000 people from the Financial Conduct Authority.

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.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week