Making timely bills and credit commitments is a struggle for a large number of people - one in five. This number was recorded in January 2023, according to the city regulator. January usually brings along struggle for most people as the Christmas bills pile up.
According to the Financial Conduct Authority (FCA), the number of those struggling has jumped from around 7.8 million in May last year to 10.9 million in January 2023, increasing by 3.1 million since May 2022. And the number of UK adults who have missed bills or loan payments in at least three of the previous six months has also increased from 4.2 million (8%) in May 2022 to 5.6 million (11%) in January 2023, estimated by the regulator to have increased by 1.4 million.
Researchers also found that 29% of mortgage holders and 34% of renters have experienced payment increases in the six months up to January this year. On the other hand, there is an estimated 7% people who have reduced their level of cover – leaving them vulnerable if something goes wrong, while there are signs of some people reducing their insurance cover to save money. Eight per cent of people have cancelled one or more policies. The FCA also found the obvious impact of cost of living on people’s mental well-being.
The FCA is suggesting borrowers to ask for help from their lenders if they are struggling to keep up with payments. It has also forecasted that 356,000 people will have missed a mortgage payment by the end of June 2024.