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| Millions miss bills as finances bite | Millions miss bills as finances bite |
| (35 minutes later) | |
| An estimated 4.1 million people are in financial difficulty owing to missed domestic or credit bills, a major study has found. | An estimated 4.1 million people are in financial difficulty owing to missed domestic or credit bills, a major study has found. |
| These consumers - most likely to be aged between 25 and 34 - have failed to pay bills in three or more of the last six months. | These consumers - most likely to be aged between 25 and 34 - have failed to pay bills in three or more of the last six months. |
| The findings come as part of a survey of 13,000 people by the regulator, the Financial Conduct Authority (FCA). | The findings come as part of a survey of 13,000 people by the regulator, the Financial Conduct Authority (FCA). |
| It suggests 25.6 million consumers could be vulnerable to financial harm. | It suggests 25.6 million consumers could be vulnerable to financial harm. |
| This means that they display at least one of a series of issues, such as lack of internet access or an overdraft, so their finances would be at an increased risk if something went wrong. | This means that they display at least one of a series of issues, such as lack of internet access or an overdraft, so their finances would be at an increased risk if something went wrong. |
| Rising costs | Rising costs |
| The research, the first of its kind by the regulator, revealed a range of concerns among consumers at a time of weak wage growth, but also low-cost credit. | The research, the first of its kind by the regulator, revealed a range of concerns among consumers at a time of weak wage growth, but also low-cost credit. |
| It concluded that 15 million people had low levels of resilience to a bill shock, that eight million were struggling with debt, and 100,000 had used an illegal money lender in the last 12 months. | It concluded that 15 million people had low levels of resilience to a bill shock, that eight million were struggling with debt, and 100,000 had used an illegal money lender in the last 12 months. |
| One in six (17%) of those with a mortgage or who are paying rent said that they would struggle if monthly payments rose by less than £50. | One in six (17%) of those with a mortgage or who are paying rent said that they would struggle if monthly payments rose by less than £50. |
| A rise in interest rates, heavily hinted by policymakers at the Bank of England, could affect many of these people - especially if the Bank rate rose rapidly. | A rise in interest rates, heavily hinted by policymakers at the Bank of England, could affect many of these people - especially if the Bank rate rose rapidly. |
| Analysis: Kamal Ahmed, economics editor | |
| Rent, car loans, mortgages, credit cards, pay day loans, unsecured credit, overdrafts - with real wages falling, the amount of debt we are taking on is rising and the pressure we are under is increasing. | |
| For many, a savings cash buffer to deal with shocks and rising prices is non-existent. | |
| When it comes to the build up of debt, this is a classic story of supply and demand. | |
| The digitisation of financial products - making many loans little more than a mobile phone swipe away - has meant that supply has become broader and easier. | |
| Historically low interest rates have also made products cheaper, meaning that taking on debt appears to be low cost, in the short term at least. | |
| Read Kamal's blog in full | |
| In the same week as the BBC News Money Matters series revealed worrying levels of debt among young adults, the FCA report highlights the issue again for 25 to 34-year-olds. | In the same week as the BBC News Money Matters series revealed worrying levels of debt among young adults, the FCA report highlights the issue again for 25 to 34-year-olds. |
| Its findings show that 23% of consumers of this age were "over-indebted", the highest proportion of any age group. | Its findings show that 23% of consumers of this age were "over-indebted", the highest proportion of any age group. |
| The report also found that this group were most likely to be in difficulty (13%) or just surviving with their finances. | The report also found that this group were most likely to be in difficulty (13%) or just surviving with their finances. |
| "This [research] exposes the story around the scale of those who are potentially in difficulty in the younger generation," said Christopher Woolard, executive director of strategy and competition at the FCA. | "This [research] exposes the story around the scale of those who are potentially in difficulty in the younger generation," said Christopher Woolard, executive director of strategy and competition at the FCA. |
| Problems at every age | Problems at every age |
| He added that there were "challenges" faced by every age group and that flexibility was required to ensure that these various issues were tackled. | He added that there were "challenges" faced by every age group and that flexibility was required to ensure that these various issues were tackled. |
| The report revealed: | The report revealed: |
| The FCA said that the survey would provide a "wealth of information" that would be used when deciding how to protect vulnerable consumers in the future. | The FCA said that the survey would provide a "wealth of information" that would be used when deciding how to protect vulnerable consumers in the future. |