One in ten people have no cash saving and one in five have less than £1,000 to draw upon in an emergency according to research conducted by the Financial Conduct Authority.
The regulator said it considered 40% of people to have ‘low financial resilience’, meaning they have missed payments, are struggling to keep up with commitments, or don’t have savings to help them through difficulties.
For later life practitioners the research found 33% of adults with a defined contribution pension have less than £10,000 saved; and 61% of people with more than £10,000 in investible assets held at least three-quarters of these assets in cash, rather than investments. The FCA say it wants to see more people holding ‘mainstream investments to improve long-term returns.’
The regulator says part of its new strategy is is working to improve people’s access to help, guidance and advice so that everyone can access the support they need, at a cost they can afford, to make informed decisions for their financial future.
Sarah Pritchard, Executive Director of Consumers and Competition at the FCA, commented:
“Our data shows that finances are stretched for many – with some unable to save for a rainy day. And we know that some do not have the confidence to invest. But there are improvements – more people with current accounts and less digital exclusion. Our strategy will build on this to help people better navigate their financial lives.”
The research found where consumers sought support, their financial pressures were eased. Of the 1.7 million people who had used a debt advice or debt management service in the previous 12 months, 61% said their debts were more manageable as a result. The FCA cited the work of lenders in providing options for people struggling with repayments.
It also said there has been ‘progress’ on access to banking services with more people now holding a current account, and fewer being denied basic accounts. Digital adoption is also on the increase with just 2% of adults (1.2m) identified as ‘digitally excluded’, down from 14% (6.9m) in 2017.
The FCA points to its work on Consumer Duty, and the market study of pure protection insurance products as evidence of its efforts to help and protect consumers.
