FCA: Seeking advice makes financial pressures easier to manage

Seeking advice can make a positive difference if you have money problems, the Financial Conduct Authority (FCA) has said.

According to FCA research, nearly two-thirds (61%) of people who’ve used a debt advice or debt management service in the last year found their debts became easier to deal with.

“When consumers seek support, it makes financial pressures more manageable,” the FCA said.

Figures from the watchdog show that nearly four in ten (39%) adults have unsecured debts, owing an average of £2,500.

Many people aren’t ready for shocks and emergencies

FCA data shows that one in four adults has low financial resilience.

This means they may be falling behind on bills, find it hard to meet financial commitments or have little to no savings to rely on in an emergency.

In fact, figures show that: 

• one in 10 adults have no cash savings at all
• one in five have less than £1,000 available in case of an emergency

Access to banking services has improved

Despite these gloomy figures, there were signs of positive progress in some areas.

For example, the FCA has seen an increase in the number of people holding current accounts, and fewer people being denied basic bank accounts.

There has also been a marked improvement in digital access.

The number of adults who are digitally excluded has fallen significantly from 6.9 million (14%) in 2017 to just 1.2 million (2%) today. 

This means more people are now using online and mobile banking, giving them better tools to manage their money.

“Our data shows that finances are stretched for many, with some unable to save for a rainy day,” said Sarah Pritchard, executive director of consumers and competition at the FCA.

“But there are improvements - more people with current accounts and less digital exclusion.”