FCA survey finds 47% of UK adults with characteristics of vulnerability

The Financial Conduct Authority's Financial Lives Survey 2022 found that 47% of UK adults had characteristics of vulnerability in May 2022, up from 46% in February 2020, an increase of nearly a million people¹. The figure was published by Kensington Mortgages in a customer support page that cites the FCA survey as its source¹.

The same page sets out the four categories of vulnerability the FCA uses: health, life events, resilience and capability¹. Health covers conditions or illnesses that may affect a person's ability to carry out day to day tasks, including physical disability, critical, severe or long-term illness, hearing or visual impairment, mental wellbeing, and memory or learning impairments¹. Life events include bereavement, relationship breakdown, planning for or entering retirement, domestic or financial abuse, an unexpected change in income, and caring responsibilities¹. Resilience covers limited savings to fall back on in emergencies, or reliance on all monthly income to cover planned expenses¹. Capability covers limited experience of financial matters or low confidence in managing money, including difficulty with reading where English is not a first language or where someone is dyslexic, and low confidence with digital devices¹.

The FCA's earlier survey, published in October 2017, suggested half of UK adults had characteristics of potential vulnerability, according to the Financial Ombudsman Service's annual review for 2017/2018². That review, published on 30 May 2018, does not give a directly comparable percentage to the 2022 figure².

The Ombudsman's 2017/2018 review recorded 1,456,396 enquiries and 339,967 new complaints, and it resolved 400,658 complaints including 32,780 ombudsman decisions². Payment protection insurance accounted for 55% of complaints received that year, general insurance 11% and banking and credit 31%². The review also noted the FCA's Plevin rules and guidance on undisclosed commission, published on 29 August 2017, and a complaints deadline of 29 August 2019². It said the planned transfer of regulation of claims management companies to the FCA would take effect from April 2019, with complaints about those companies transferring to the Ombudsman².

Why it matters for households

The 47% figure means that, on the FCA's definition, close to half of UK adults have at least one characteristic that firms are expected to take into account when dealing with them¹. The categories are broad: they include not only illness and disability but also bereavement, job loss, relationship breakdown, retirement, caring responsibilities, thin savings and low confidence with money or digital services¹. The increase from 46% in February 2020 to 47% in May 2022 amounts to nearly a million more people¹.

For anyone dealing with a bank, lender, insurer or pension provider, the practical effect is that firms are asked to identify these circumstances and adjust how they communicate and how they handle arrears, claims and complaints¹. The Ombudsman's figures show the volume of disputes that reach the ombudsman stage: 32,780 decisions in 2017/2018 alone². Where a complaint cannot be settled with a firm, the Financial Ombudsman Service is the route for most individual disputes, and the Financial Conduct Authority is the regulator that sets the rules firms must follow².

What happens next

The FCA's Financial Lives Survey 2022 is the source of the 47% figure¹. No further survey results, and no date for the next Financial Lives Survey, are given in the material available¹. The Ombudsman's review records the PPI complaints deadline of 29 August 2019 and the transfer of claims management company regulation to the FCA from April 2019².