Insurance policyholders report biggest rise in problems

The share of insurance policyholders who experienced a problem with their policy rose to 16 per cent in May 2024, up from 12 per cent in 2022, according to the Financial Conduct Authority's Financial Lives 2024 survey, published on 16 May 2025¹. The regulator said this was the biggest rise in problems across the product areas it tracks, and attributed it mainly to a higher number of policyholders saying their policy cost more than they expected¹.

The survey, which covered nearly 1,300 questions, was carried out between 5 February and 16 June 2024, with 17,950 adults taking part¹. Just under 45 per cent of participants completed it in May 2024, more than in any other month¹.

The report also recorded a rise in switching. Motor insurance had the highest switching rate of any product over the last three years, at 61 per cent, up 9 percentage points from 52 per cent in 2022¹.

On wider household finances, the survey found 13.1 million adults, or 24 per cent of all UK adults, had low financial resilience in May 2024, which the FCA said was not statistically different from the 24 per cent, or 12.9 million, recorded in May 2022¹. The number of adults with characteristics of vulnerability fell to 26.4 million, or 49 per cent of UK adults, from 27.3 million, or 52 per cent, in May 2022¹.

Current account holding rose to 52.5 million adults, up from 50.8 million in 2022, and the unbanked population fell to 0.9 million from 1.1 million¹.

Why it matters for households

The insurance figure measures how many policyholders ran into a problem, not how many hold a policy, so the rise from 12 per cent to 16 per cent means a larger share of people with cover reported an issue in 2024 than two years earlier. The FCA links the increase mainly to policyholders finding their policy cost more than they expected, which points to the price paid at renewal or purchase rather than to claims handling¹.

The switching figures sit alongside that: motor insurance, where 61 per cent of policyholders had switched in the last three years, is the product area with the most movement¹. How premiums are set, including Insurance Premium Tax, is set out in our guide to how insurance premiums are worked out.

The resilience and vulnerability figures describe the backdrop against which those insurance problems were reported. Low financial resilience was unchanged at 24 per cent of adults between 2022 and 2024, and the number of adults with characteristics of vulnerability fell by 0.9 million over the same period¹. The survey also covers insurance more broadly, including which products people hold and how they pay for them.

What happens next

The FCA said it will make the 2024 survey data available through GeoDS by September 2025¹. The report also notes that the FCA became responsible for the regulation of funeral plans in July 2022, following concerns about the conduct of some pre-paid funeral plan providers¹. No further dates for insurance-specific action are given in the key findings.