Over half the UK’s adult population – 27.7 million people – have traits of vulnerability, including poor health, poor financial resilience or recent negative life events, new FCA research shows.
This is an increase of 15% since February, when 24 million people exhibited characteristics of vulnerability.
COVID-19 has had a serious impact on Britain’s financial resilience. More than a quarter of adults (14.2 million) were classified as “not very financially resilient”.
Over the course of 2020, the number of people with low financial resilience increased by a third (3.5 million). In October, around one in three (15.9 million) said household incomes would fall over the next six months, while 25% (13.2 million) would expect to make ends meet.
A staggering 5.6 million people said they would likely use a grocery bank while 17.9 million said they could cut down on essentials.
Worryingly, 8.1 million people will take on more debt as a result of the pandemic – although 14% of adults in the UK have seen their financial situation improve.
Tom Selby, Senior Analyst at AJ Bell, comments, “These latest FCA figures demonstrate the profound and harrowing impact that coronavirus is having on people who live, work and save in the UK.
“Over half of the UK’s adult population – an astonishing 27.7 million people – currently have traits of vulnerability, while over 14 million have poor financial resilience. Both numbers increased in 2020.
“This is not surprising, given the health, lifestyle and financial impact of the pandemic on people’s lives, but it remains of serious concern. The fact that more than 5 million people expect to turn to a food bank at some point is perhaps the most striking demonstration of the desperate situation many people face.
“It is also worrying that 8.1 million people are expecting to take on more debt to make ends meet, potentially creating financial problems and piling up interest payments on debt.
“Before you take on debt, make sure you cut other costs first and, if you can’t, have a plan to pay off the debt. For many this will feel impossible, but borrowing from the never-never will only add to the financial pain in the future. “