May 23, 2024

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More Than 7 Million Britons Still Struggle to Pay Bills, Finance Watchdog Says

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(Bloomberg) — Around 7.4 million people in the UK are struggling to pay the bills, underlining the scale of the cost of living crisis even as the total declines from last year’s peak.

The number in financial difficulty is down from 10.9 million in January 2023, yet it’s still far higher than the 5.8 million recorded in February 2020, before inflation spiked, according to the Financial Conduct Authority. 

The regulator — citing a survey of 3,450 UK adults conducted in December and January — calculated that 5.5 million people fell behind or missed paying one or more domestic bills or credit commitments in the previous six months.

In the 12 months to January, 2.7 million adults sought help from a lender, a debt adviser or other financial support charity, the FCA said. Renters, single adults with children, adults from a minority ethnic background and people living in the north-east of England were more likely to be in financial difficulty, the regulator said. 

The findings are “a stark reminder of the financial struggles that continue to be a reality for millions of households,” said Lauren Peel, director of consumer insights at Fair4All Finance.

The FCA last year introduced a consumer duty, which requires companies to ensure they act broadly in the interests of retail customers. It is also making permanent a pandemic-era requirement for lenders to do more to support borrowers in difficulty — a rule that’s being put to the test as inflation and higher interest rates continue to squeeze many British households.

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©2024 Bloomberg L.P.


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