The regulator found that those that do open up tend to have better experiences. Three-quarters (74%) of vulnerable customers who told their firm about their circumstances said staff asked the right questions to understand their situation, while six in 10 (58%) said their firm took action to provide support they needed.
The term ‘vulnerability’ covers people in all manner of situations, from those who face mental health struggles and physical health issues to cognitive impairment or financial hardship. The often transient nature of vulnerability means it can also be difficult, if not impossible, for firms to spot.
Anyone can become vulnerable due to health, life events, ability to withstand financial or emotional shocks, or because of poor financial or digital literacy.
But a quarter (25%) of vulnerable customers said they felt uncomfortable explaining their situation to their provider, while over a third (37%) cited feeling embarrassed.
The FCA issued guidance to help financial services firms support consumers in vulnerable circumstances in 2021. Then, in 2023, it introduced the Consumer Duty, which requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances.
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‘Crucial’ that customers ‘feel safe to open up’
Peter Tutton, head of policy, research and public affairs at StepChange, said: “At StepChange, it’s very common for people struggling with debt to have additional vulnerabilities; in fact, over half (55%) of new clients have a vulnerable characteristic in addition to their debt problem – so it’s worrying that so few vulnerable customers are disclosing their needs to their creditors.
“We know many people in vulnerable circumstances face barriers to support, such as fear and anxiety about the consequences of asking for help, not knowing what support is available and mental health problems that make it difficult to cope with their situation and take action.
“It’s encouraging that many customers who reach out for support have positive experiences, and this research emphasises why the Consumer Duty is so important; it’s vital the FCA continues to raise expectations of firms to support customers in vulnerable situations.”
Lisa Picardo, chief business officer at PensionBee, said: “We have always been committed to providing the best possible support for vulnerable customers, and we welcome the FCA’s emphasis on encouraging individuals to disclose their needs.
“Vulnerability can take many forms, from health challenges to life events or financial instability, and it is crucial that financial services firms create an environment where customers feel safe to open up. The FCA’s findings highlight the importance of offering personalised, proactive care – not just reacting when a customer reaches out, but anticipating their needs and offering tailored support.
“The research also underscores the need to break down the barriers that prevent customers from disclosing their circumstances. Whether it’s fear of embarrassment, concerns about being treated differently, or uncertainty about whether firms can help, these are real challenges that must be addressed. We must foster an atmosphere of trust and understanding, where customers feel confident that they will be treated with dignity and respect, and that their needs will be met in a way that supports their financial wellbeing.”
