Almost 8m people in UK struggling to pay bills

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One in four adults either in financial trouble or at brink of difficulty, FCA survey finds

Millions of people in the UK are struggling to pay their bills, according to the City watchdog, which
said a growing proportion of the population is having trouble making ends meet
A survey by the Financial Conduct Authority (FCA) laid bare the impact of the cost of living crisis,
saying about one in four (24%) of adults in the UK were either in financial difficulty or would fall
into trouble if they suffered a financial shock
The FCA found that about 7.8 million people were finding it a heavy burden to keep up with their
bills, an increase of about 2.5 million people since 2020, as wage growth failed to keep pace with
soaring inflation at 40-year highs, currently at 10.1%
Meanwhile, 4.2 million people had missed bills or loan payments in the six months before the survey
took place, in the four months between February and June
The financial challenges were concentrated in more deprived areas across the UK, with people in
economically challenged regions roughly seven times more likely to be in financial difficulty than
their peers. About 12% of people in the north-east and 10% in the -west were struggling financially,
compared with 6% of people in the south-east and south-west.
The statistics were gathered as part of the FCA’s financial lives survey, which polled more than
19,000 people and will be published in full in early 2023

 7.8 million are finding it a heavy burden to keep up with their bills, up from 5.3m in 2020
 31.9 million people (60% of all UK adults) across the UK are finding it a heavy burden or
somewhat of a burden to keep up with their bills, an increase of around 6 million people since
2020
 There has been an increase in people in financial difficulty, with 4.2 million people missing
domestic bills or credit repayments in 3 or more of the last 6 months, up from 3.8 million in
2020.
 12.9 million UK adults now have low financial resilience – 1 in 4 (24%) of all UK adults –
and up more than 2 million on 2020 (10.7m). These are people who are in financial difficulty,
or who could quickly find themselves in difficulty if they suffer a financial shock
 Adults living in the most deprived areas of the UK are nearly 7 times more likely to be in
financial difficulty than those living in the least deprived areas; 27% of black people said they
found it a heavy burden to keep up with bills, compared with 15% of all UK adults; 12% of
people in the North East and 10% in the North West are in financial difficulty, compared with
6% in the South East and South West

A recent survey showed that, if most working Britons lost their jobs, they would survive financially
for only 19 days
2020 The average household would last 24 days without income

Legal and General (L&G) recently ran a report which was released in
November 2020 which looked at how financially resilient households really are.
In the report detailed in Cover Magazine, it explains that the average household
believes it could last 90 days, if it were to lose its income and rely solely on
savings. However, in reality, it is just 24 days

These are just some of the findings which were revealed in this year’s report,
which L&G have produced since 2013

The report assesses the financial stability of people across the UK by analysing
how long they believe they could survive financially if they lost their income

The perception of those surveyed this year was that the average household
would be 90 days from the breadline if it lost its income. But, in reality, L&G
calculated that the average household could only last for 24 days. A difference
of 66 days

The report helps advisers highlight to their clients that perception is very
different from reality, which can have a real impact on financial planning,
especially if households are underestimating how far their savings will stretch
should they fall ill

How do people cope with losing their income?

One of the main ways people cope with losing their income is to rely on their
savings (1 in 3). Yet the report shows that 1 in 5 households have no savings at
all and 2 in 5 households have less than £1,000 in savings

The report found that people felt they would need £12,207 to feel financially
secure. This would take the average household four years to save up, based on
the average of what is saved each month. Worryingly, this means that it could
take 14 years to save a full year’s earnings