As the FCA confirms stronger protections for borrowers, the regulator is reminding those in financial difficulty to: 

• Contact your lender for support if you’re worried about keeping up with payments. Talking to your lender about your options won’t impact your credit score.  

• Visit MoneyHelper for tips on living on a squeezed income and to find free, expert debt advice. 

Over 5m (5.5m) people said they had fallen behind or missed paying one or more domestic bills or credit commitments in the previous 6 months from January 2024. This was down from 6.6m people a year earlier.  

In the 12 months to January 2024, 2.7m adults sought help from a lender, a debt adviser or other financial support charity because they found themselves in financial difficulty. Nearly half (47%) of those that sought help said they were in a better position as a result. However, 2 in 5 adults who had fallen behind on their bills said they had avoided talking to their lender about their finances.  

Renters, single adults with children, adults from a minority ethnic background and people living in the north-east of England were more likely to be in financial difficulty.  

Sheldon Mills, Executive Director of Consumers and Competition said: 

"Our research shows many people are still struggling with their bills, though it is encouraging to see some benefitting from the help that’s available.  

"If you’re worried about keeping up with payments, reach out to your lender straight away. They have a range of support options and will work with you to agree the best one for you. You can also find free debt advice through MoneyHelper." 

The FCA has reminded financial firms they must support their customers and work with them to manage payment difficulties. The regulator has cracked down where firms haven’t met its expectations, securing nearly £60 million in compensation for 270,000 customers.  

The FCA has also confirmed stronger protections for borrowers. It is making permanent the expectations on lenders to support borrowers in difficulty, which were introduced during the pandemic, with additional targeted changes designed to improve outcomes for consumers. 

Notes to editors:  

• The new cost of living survey is available on request. The survey was conducted among 3,450 UK adults who had previously completed the FCA’s main Financial Lives survey in May 2022.  It was conducted between 8 December 2023 and 28 January 2024, with 76% of the responses provided in January 2024.
• Copies of the policy statement and updated mortgage guidance available on request.  
• The new rules come into force on 4 November 2024. By incorporating aspects of its tailored support guidance (TSG) into its rulebook, the FCA is:  
  • expanding protections beyond customers who have already missed payments, to those at risk of payment difficulty 
  • widening the forbearance options firms should consider 
  • enhancing expectations around customer engagement and providing information including on money guidance and debt advice 
  • requiring credit firms to consider customers’ individual circumstances when providing forbearance (which is already expected for mortgage firms).
• The FCA is also introducing additional improvements beyond the TSG by:  
  • introducing guidance to help firms determine their necessary and reasonable costs in setting fees and charges  
  • allowing mortgage lenders greater scope to clear a payment shortfall by adding it to the total amount owed, meaning customers are better able to access new products and build their credit score  
• To support people dealing with cost of living pressures, the FCA has also: 
  • reminded 3,500 lenders how it expects them to provide tailored support to borrowers who get into financial difficulty   

  • updated its rules to support key commitments made by lenders as part of the government’s mortgage charter, building on guidance for how lenders can help customers worried about keeping up with payments   

  • overhauled overdraft charges, saving consumers nearly £1 billion    

  • banned providers of debt advice from receiving referral fees from debt solution providers, saving consumers struggling with debt thousands of pounds in unnecessary fees and ensuring they receive better quality advice 

  • warned banks to improve the way they treat small business owners when collecting and recovering debts  

  • warned insurers to protect customers from unnecessary products or add-ons and unfair penalties.