New research has reported that over half of adults in the UK are experiencing financial strain. Most of them can’t afford to save for a rainy day, let alone pay down their debt. The United Kingdom government’s Financial Conduct Authority (FCA) recently reported that tens of millions of adults across the UK are facing savings gaps. They do all that while shouldering record-high levels of debt.
Matt Dronfield, a public representative on the FCA, warned that millions were suffering under the triple threat of these three dangerous forms of debt. These are rent or mortgage backpay, council tax, and energy-debt defaults. Currently 2.8 million people in the UK are living with long-term credit card debt. Moreover, 12 million Americans are stressed and anxious over their finances.
The statistics reveal an unsettling trend. Almost half (47%) of adults with credit or loans confess to feeling anxious and stressed about their financial obligations. These findings paint a pretty scary picture for 3.8 million retirees who are concerned they may outlive their savings. They worry their savings won’t stretch over their entire retirement.
Sarah Pritchard, another FCA spokesperson, stated, “Our data shows that finances are stretched for many – with some unable to save for a rainy day.” This impression, while unfortunate, points to a troubling truth. Across the UK one in ten adults now save nothing and those that do have average savings of just £5,000-£6,000. Shockingly, 21% of people don’t have more than £1,000 and 10% say they have no savings at all.
The challenges extend beyond savings. Over 44 million adults in the UK are struggling with unsecured debt. Even more worrisome is how the picture differs for certain groups. For example, 40% of single parents and 35% of women aged 25–34 currently rely on buy now, pay later deferred credit products to cover their costs.
Dronfield acknowledged that millions of people are locked out of banking services. It’s not just an inconvenience, it often makes financial hardships much worse for almost 10 million people who can’t readily access a bank branch.
“That’s really exciting and groundbreaking,” Dronfield said. If you’re not concerned about it, then a friend or relative definitely will be.
Dronfield suggested a fix for people who face savings hurdles. He encouraged people to practice “pay yourself first”—putting money into a savings account as soon as you get paid, even if it’s just a little. This straightforward strategy rewards the people stuck in a hamster wheel of high-interest debt and predatory spending. This is supportive of their efforts to save and build wealth.
The general picture paints a very worrying scene when it comes to financial resilience at both a national and UK finance level. The FCA has found that around 13 million people—roughly a quarter of the adult population—show signs of being financially fragile. Without proper preparation, millions face the reality of being unprepared for an unexpected expense and an increased risk of financial insecurity.
