The Financial Conduct Authority (FCA) has issued a reminder to borrowers that assistance is available from their lenders if they are struggling to meet their payment obligations.
This comes as the regulator noted a significant rise in the number of individuals having difficulty paying bills and meeting credit repayments, with a surge of 3.1 million people since May 2022, bringing the total to 10.9 million.
The FCA also reported an increase in the number of adults missing bills or loan payments in at least three of the last six months, with a rise of 1.4 million from 4.2 million to 5.6 million in the same period.
The FCA has persistently emphasised to financial firms the importance of supporting their customers and collaborating with them to address payment issues. This includes sending out communications to industry leaders to ensure they understand the regulator’s expectations.
Firms that have failed to provide the necessary support to their customers have been instructed by the FCA to amend their practices. As part of this, the FCA has reminded 3,500 lenders of their obligation to assist borrowers in financial difficulty and has ordered 32 lenders to alter their customer treatment approach. This intervention has resulted in £29m in compensation for over 80,000 customers.
Furthermore, the FCA’s Financial Lives survey revealed the impact the cost of living is having on individuals’ mental wellbeing. Approximately half of UK adults, equating to 28.4 million people, reported feeling more anxious or stressed in January 2023 due to rising living costs than they did six months prior.
Sheldon Mills, executive director of consumers and competition, said: “Our research highlights the real impact the rising cost of living is having on people’s ability to keep up with their bills, although we are pleased to see that people have been accessing help and advice.”
He added: “If you’re concerned about your finances, you do not need to worry alone. We’ve told lenders that they should provide support tailored to your needs. And, if you find yourself in debt or want to know more about how to manage your finances, free expert advice is available.”
