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Nearly 8 Million people are struggling with bills in the UK, says city watchdog.
According to a Financial Conduct Authority (FCA) poll, roughly one in four (24%) persons in the UK are either having financial difficulties or would experience problems if they had a financial shock. This statistic exposes the effects of the cost of living issue.
The FCA discovered that, while wage growth lagged behind surging inflation at 40-year highs, currently at 10.1%, around 7.8 million people were finding it difficult to pay their expenses, an increase of about 2.5 million since 2020.
In the meantime, 4.2 million people missed bills or loan payments in the four months from February to June that made up the six months prior to the poll.
People in economically challenged regions are almost seven times more likely to be in financial problems than their peers, with the financial difficulties concentrated in more impoverished areas of the UK. Compared to 6% of people in the south-east and south-west, about 12% and 10% of people in the north-east and north-west, respectively, were having financial difficulties.
The information was gathered as a result of the FCA’s financial lifestyles survey, which interviewed over 19,000 people and will be published in the early months of 2023.
According to reports, the government is considering hiking benefits in line with a 5.5% increase in wages rather than inflation, which would put more strain on already-stressed households.
A working single parent with one child would lose £478 annually, according to the Resolution Foundation think tank, while a single disabled adult on universal credit would likely lose £380. Three children and a working couple would lose £978.
“Our research shows that people up and down the country are struggling to keep up with their expenses,” said Sheldon Mills, a director at the FCA who oversees consumer and competition concerns.
“If you’re having financial problems, you don’t have to fight by yourself. Free debt counselling is available, and we’ve instructed businesses to cooperate with their clients to resolve any payment issues.