The Financial Conduct Authority (FCA) is again urging consumers struggling financially during the pandemic to seek help - after discovering that 12 million people have "low financial resilience".
The regulator is reaching out and signposting people to free debt advice, after its own study found that 12 million UK adults may be struggling right now with bills or loan repayments.
The data shows that two million of those who are not financially resilient have become so since February. It also shows that some 31% of adults have experienced a decrease in household income, with black, Asian and minority ethnic (BAME) and young people more likely to be affected.
The survey found that 36% of respondents who already had low financial resilience and had a mortgage said they are likely to fall behind on mortgage payments, while 36% of those with loans or credit cards are worried about repayments. In addition, 42% of renters said they are worried about falling behind on rent payments.
“We want to remind consumers, especially those who are newly in financial difficulty that lenders are able to provide you with support,” said Sheldon Mills, interim executive director of strategy and competition at the watchdog.
“There are options available which will reflect the uncertainties and challenges that many customers will face in the coming months. It is also important that households in serious financial difficulty seek debt advice for support.”
A representative survey of more than 7,000 people during July, the study also shows that BAME adults are more likely to have reduced working hours, and those aged between 25-34 are the most likely, by far, to have had a change in employment due to the pandemic.
The FCA said this will affect the take up of debt advice, with 19% of those aged 25-34 saying that they were more likely to seek debt advice in the next six months, compared to two percent of those aged 55-64.
Jonathan Davidson, the FCA’s director of supervision - retail and authorisations, will be speaking at the Credit Summit (3-6 November).