FCA publishes findings from latest Financial Lives cost of living re-contact survey

The FCA has published the findings from its latest Financial Lives cost of living re-contact survey.

The survey was conducted between 8 December 2023 and 28 January 2024. Where possible, it provides a comparison with the results of its January 2023 survey.

The findings reveal that, although there has been some improvement in the number of people finding it hard to manage increases in the cost of living, challenges remain for many groups and living costs continue to have a significant financial impact on adults across the UK.

The January 2024 survey found:

• 14.6 million (28%) reported either not coping financially or finding it difficult to cope (18.9m in January 2023)
• 7.4million (14%) felt heavily burdened keeping up with their domestic bills and credit commitments (10.9m in January 2023)
• 5.9million (11%) had no disposable income (7.7m in January 2023)
• 5.5million (11%) had fallen behind or missed paying one or more domestic bills or credit commitments in the previous 6 months (6.6m January 2023)

Findings also revealed that over one in five adults (22% or 11.8m) cancelled an insurance or protection policy (6% or 3.2m), reduced their level of cover of a policy (6% or 3.1m), and/or chose not to buy a policy (12% or 6.4m), in the 12 months to January 2024, to save money or because they could not afford the premiums.

Despite results reflecting an improvement from those recorded in January 2023, they remain worse than the FCA’s historic data. For instance, the 2020 survey, undertaken before the cost-of-living increases, found that just 5.8million (11%) people felt heavily burdened keeping up with domestic bills and commitments, with 5.2million (10%) having missed paying one of these bills the previous 6 months.

The findings also highlighted that a higher proportion of adults in certain groups were struggling financially in January 2024, compared with the UK average. These included adults from low-income households; unemployed adults and others not in work such as the long-term sick and full-time carers; renters; single adults with financially dependent children; and those living in the North of England and in the most deprived areas of the UK.

As the survey highlights the financial strain the cost-of-living continues to place on UK households, firms should ensure that they adequately detect and support those who are, or are likely to be, in financial difficulty, and continue to fulfil their obligations to customers, and effectively monitor and assess outcomes, under the Consumer Duty. For additional advice, firms can refer to the FCA’s guidance for insurance firms on supporting customers in financial difficulty.

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