According to the Financial Conduct Authority (FCA), 3.1 million more people encountered difficulties in January compared to May of the previous year.
The FCA’s findings indicate that 11% of adults had failed to meet their bill or loan payments in at least three of the preceding six months. As the cost of living continues to rise, putting a strain on household budgets, the FCA urged individuals to seek assistance.
Sheldon Mills, the executive director of consumers and competition at the FCA, emphasised the tangible impact of escalating living costs on people’s ability to stay on top of their financial obligations. While acknowledging that people have been accessing help and advice, Mills stressed the importance of lenders tailoring their support to individual needs.
Over the past 18 months, energy, food, and fuel prices have experienced substantial hikes, adding to the financial burden on individuals. Most goods have seen price increases, and the current inflation rate stands at 10.1%, indicating an average price surge of over 10% in comparison to a year ago.
Researchers observed that 29% of adults with mortgages and 34% of renters witnessed a rise in their payments in the six months leading up to January. Additionally, some individuals resorted to reducing or canceling their insurance policies as a means of alleviating budgetary pressure.
The FCA reiterated its call for firms to prioritize supporting customers and collaborate with them to address payment and bill-related challenges.
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