Financial Lives 2023 snapshot shows impact of rising cost of living

FCA has published a snapshot of its most recent Financial Lives survey, which it carried out in January 2023. It found:

  • 1.4m more adults missed payments on domestic bills or credit commitments in 3 or more of the previous 6 months. This was an increase from 4.2m (8%) in May 2022, to 5.6m (11%) in January 2023;
  • The number of people who felt that making these kind of payments was a heavy burden jumped from 7.8m (15%) to 10.9m (21%);
  • 29% of UK adults with a mortgage and 34% of renters experienced payment increases in the 6 months to January 2023;
  • Of UK adults who were insurance or protection policy holders in May 2022, 8% cancelled one or more policy, and 7% reduced the level of cover on one or more policy. This was specifically to save money due to the rising cost of living. As some policyholders did both, 13% of May 2022 policyholders (6.2m people) cancelled and/or reduced cover; and
  • The toll on mental wellbeing was considerable – just over 1 in 2 UK adults (28.4m people) were more anxious or stressed due to the rising cost of living.

The information provided at this stage includes some of the participants’ statements on how the rising cost of living is affecting them. It also features some respondents’ more positive experiences when dealing with firms, and encouragement for consumers to seek support early from their credit or mortgage lenders if they are struggling with payments. FCA highlighted to firms the beneficial impact of proactive support and appropriate forbearance.

The full report will be published this summer.

Laura Wiles