The latest Financial Lives Survey commissioned by the Financial Conduct Authority shows that there are now 10.1 million over-indebted people in the UK. Whilst this is 2.7 million lower than at the height of the cost of living crisis, it remains nearly a third higher than in 2017.
There is further cause for concern beneath the headline figure as the number of people falling behind on bills and in financial difficulty has only dropped slightly over the previous year, from 5.6 million to 5.5 million.
The report is one of the largest investigations of personal finance and debt levels in the UK. First conducted in 2017, it has been run four times subsequently, and allows us to observe over-indebtedness levels over that period.
The survey asks the objective question of whether people have fallen behind on or missed any payments for credit commitments or domestic bills for any three or more months over the previous six-month period.
The survey also explores the subjective impact of debt on people, asking to what extent they feel that keeping up with their domestic bills and credit commitments is a burden.
This is an important question because the fear of unpayable debt can have a large impact on somebody’s wellbeing, even if they are currently just about managing to pay their bills. It also gives us an indication of the amount of people who could be pushed into a debt crisis by a change in circumstances like being made redundant or having to repay a benefit.
The latest figures show that the household debt crisis is becoming entrenched. Despite falling headline inflation, serious structural pressures continue to weigh households down.
Real pay (nominal pay adjusted for inflation) remains lower now than in 2008 for people in nearly two-thirds of the UK. Real benefit levels (nominal benefit increases adjusted for inflation) have decreased by 8.8% since 2012.
An increasing number of people are now in so called ‘negative budgets’ – where their essential outgoings exceed their disposable income. 53% of Citizens Advice clients who seek support on their debts now have a negative budget.
The structural pressures pushing households in the UK into debt will not be alleviated by more benign economic weather alone. That’s why we created the Together Against Debt Manifesto, you can read it and add your name in support by clicking here.
Notes:
| Answered yes to the following (million) | Oct-17 | Oct-20 | May-22 | Jan-23 | Jan-24 |
| Are you falling behind on bills/credit commitments? | 4.2 | 5.6 | 5.5 | ||
| Are you finding your bills/credit commitments a heavy financial burden? | 7.8 | 10.9 | 7.4 | ||
| Overlap, removed to prevent double counting | 2.4 | 3.7 | 2.8 | ||
| Total/both (million) | 7.7 | 8.5 | 9.6 | 12.8 | 10.1 |
| % change since previous survey | 10.4% | 12.9% | 33.3% | -21.1% | |
| % change since original survey | 10.4% | 24.7% | 66.2% | 31.2% |
2017: Pg 140 https://www.fca.org.uk/publication/research/financial-lives-survey-2017.pdf
2020: Pg 106 https://www.fca.org.uk/publication/research/financial-lives-survey-2020.pdf
2022: https://www.fca.org.uk/data/financial-lives-2022-early-survey-insights-vulnerability-financial-resilience
2023: https://www.fca.org.uk/news/press-releases/help-available-those-who-need-it
2024: https://www.fca.org.uk/publications/financial-lives/jan-2024-recontact-survey-summary
The FCA stats team kindly supplied me with extra data for 2022, 2023 and 2024 to allow me to calculate this headline figure.