7.4 million British consumers are struggling to pay their bills, the financial regulator has found

According to recent findings from the Financial Conduct Authority (FCA), more than 7.4 million people in the UK experienced difficulty making bill payments or credit repayments in January, highlighting ongoing financial stress among a significant proportion of the population.

While this figure represents a decline from previous years, it remains significantly higher than pre-crisis levels, pointing to ongoing financial difficulties exacerbated by the cost of living crisis.

The FCA data, which maps household financial problems, shows a worrying trend of escalating financial problems in recent years. In February 2020, before the onset of the cost of living crisis, 5.8 million people reported struggling to pay significant bills. By January 2023, due to events such as the Russian invasion of Ukraine, this number had almost doubled to 10.9 million.

In response to these findings, the FCA is highlighting the importance of proactive engagement with lenders for those in financial difficulty. It reassures consumers that discussing financial concerns with lenders will not negatively impact their credit scores, underscoring financial companies’ obligation to listen to customer concerns and provide appropriate support.

Last year, 2.7 million people sought help from lenders, debt counselors or charities for financial support. Encouragingly, almost half of those who sought help reported experiencing better financial circumstances as a result. However, the FCA is raising concerns about the reluctance of some individuals to engage with lenders about their financial problems, with two in five individuals who fell behind on payments avoiding such discussions.

Laura Suter, director of personal finance at AJ Bell, acknowledges the mixed financial landscape reflected in the data, pointing to significant differences in the financial resilience of households. While a significant portion of the population faces financial insecurity, a majority still maintains disposable income, underscoring the distributed nature of the economic recovery.

In response to these findings, the FCA reiterates financial firms’ obligation to support customers and work with them to address payment issues. Sheldon Mills, Executive Director of Consumers and Competition at the FCA, is urging those struggling with payments to contact their lenders quickly, highlighting the availability of support options and free debt advice through resources such as MoneyHelper .