Over 7.4m people are struggling to keep up with bills and credit repayments in January 2024 according to official data published by the UK regulator. This is down from 10.9m in January 2023 but is still higher than the 5.8m recorded in February 2020, before the cost of living squeeze began.  

Approximately 5.5m people said they had fallen behind or missed paying one or more domestic bills or credit commitments in the previous six months from January 2024. This was down from 6.6m people a year earlier.  

In the 12 months to January 2024, 2.7m adults sought help from a lender, a debt adviser or other financial support charity because they found themselves in financial difficulty. Nearly half (47%) of those that sought help said they were in a better position as a result. However, two in five adults who had fallen behind on their bills said they had avoided talking to their lender about their finances.  

Renters, single adults with children, adults from a minority ethnic background and people living in the north-east of England were more likely to be in financial difficulty.  

Lender support

The regulator has reminded financial firms they need to do more to support their customers and work with them to manage payment difficulties. “Our research highlights the real impact the rising cost of living is having on people’s ability to keep up with their bills,” said Sheldon Mills, Executive Director of Consumers and Competition.

The FCA said that it has cracked down where firms haven’t met its expectations, securing nearly £60m ($76.1m) in compensation for 270,000 customers.  

Consumer outcomes

In May 2023, the FCA consulted on rules to strengthen protections for mortgage, consumer credit and overdraft customers in financial difficulty (CP23/13). This consultation included proposals to incorporate aspects of the coronavirus Tailored Support Guidance (TSG) into the FCA’s Handbook, as well as further, targeted changes to support customers in financial difficulty.

The FCA has now confirmed in Policy Statement (PS24/2) published today, that it is making the expectations on lenders to support borrowers in difficulty permanent.

By incorporating aspects of its tailored support guidance (TSG) into its rulebook, the FCA is:

• expanding protections beyond customers who have already missed payments, to those at risk of payment difficulty;
• widening the forbearance options firms should consider;
• enhancing expectations around customer engagement and providing information including on money guidance and debt advice;
• requiring credit firms to consider customers’ individual circumstances when providing forbearance (which is already expected for mortgage firms).

The FCA is also introducing additional improvements beyond the TSG by:

• introducing guidance to help firms determine their necessary and reasonable costs in setting fees and charges;
• allowing mortgage lenders greater scope to clear a payment shortfall by adding it to the total amount owed, meaning customers are better able to access new products and build their credit score. 

To support people dealing with cost of living pressures, the FCA has also:

• reminded 3,500 lenders how it expects them to provide tailored support to borrowers who get into financial difficulty;
• updated its rules to support key commitments made by lenders as part of the government’s mortgage charter, building on guidance for how lenders can help customers worried about keeping up with payments;
• overhauled overdraft charges, saving consumers nearly £1 billion ($1.27 billion);
• banned providers of debt advice from receiving referral fees from debt solution providers, saving consumers struggling with debt thousands of pounds in unnecessary fees and ensuring they receive better quality advice;
• warned banks to improve the way they treat small business owners when collecting and recovering debts;
• warned insurers to protect customers from unnecessary products or add-ons and unfair penalties. 

Reminder to those in financial difficulties

As the FCA confirms stronger protections for borrowers, the regulator is reminding those in financial difficulty to: 

• Contact your lender for support if you’re worried about keeping up with payments. Talking to your lender about your options won’t affect your credit score.  
• Visit MoneyHelper for tips on living on a squeezed income and to find free, expert debt advice. 

Mills said: “Our research shows many people are still struggling with their bills, though it is encouraging to see some benefitting from the help that’s available.  

“If you’re worried about keeping up with payments, reach out to your lender straight away. They have a range of support options and will work with you to agree the best one for you. You can also find free debt advice through MoneyHelper.”