Financial lives survey highlights urban-rural split

By agency reporter
June 25, 2018

The Financial Conduct Authority (FCA) has published the latest analysis from its Financial Lives survey. It looks at the financial situation of people across the UK and highlights where in the UK people may be more vulnerable.

The report finds notable differences between urban and rural areas. In rural areas, where there is greater reliance on bank branches, a higher proportion of people have difficulty getting to a bank and tend not to be able to use online banking. However, people in rural areas are more likely to be satisfied with their overall financial circumstances. By contrast, people living in urban areas are less likely to be satisfied with their overall financial position, are more likely to use high-cost loans and on average have higher levels of unsecured debt.

Financial Lives is the FCA’s survey of nearly 13,000 adults and is the largest tracking survey in the UK specifically looking at consumers and their use of financial services. 

The report shows a number of differences in how people in different parts of the UK, including rural and urban areas, experience financial services, such as:

  • Difficulty getting to a bank – in rural areas, a higher than average proportion of adults (13 per cent) aged 55 and over, or who are younger and have a long-term health condition, have difficulty getting to a bank. This compares to nine per cent in urban areas. On top of that, of UK adults who never use the internet, 70 per cent (or 3.7 million people) live in rural areas and the take-up of mobile banking in rural areas (23 per cent) is nearly half that in urban areas (45 per cent).   
  • Using high-cost loans and having more debt – there is a higher concentration of adults with high-cost loans in urban areas (seven per cent or 2.4 million people) than in rural areas (five per cent or 0.6 million people). Adults’ average unsecured debt is £3,600 in urban areas, compared with £2,510 in rural locations. Those paying for credit are more likely to be in urban areas (49 per cent) compared with rural areas (37 per cent).
  • Over half (51 per cent) of retired people in rural areas rely mainly on the State Pension – this is their main income compared to 37 per cent in urban areas.
  • Satisfaction with overall financial circumstances: 27 per cent of adults in rural areas are highly satisfied, compared with 20 per cent of adults in urban areas. Satisfaction in London is particularly low with just 16 per cent being highly satisfied with their finances, compared with the national average of 21 per cent. 

Across England, the highest proportion of adults with characteristics of potential vulnerability are found in the North West (55 per cent). This compares to 46 per cent in the South West. Adults in London have the highest levels of over-indebtedness (17 per cent compared to 15 per cent across the UK) and those living in Yorkshire and the Humber are most likely to be ‘in difficulty’ (11 per cent compared to the UK average of eight per cent).

Just over one in ten of the adult population (13 per cent) have no savings but the report also shows there is a clear North-South divide with more people in the North having no savings. Seventeen per cent of people in the North West and 16 per cent in the North East have no savings compared to nine per cent in the South East and 10 per cent in the South West.

Andrew Bailey, FCA Chief Executive, said: “This survey shows just how different the experience of financial services is for consumers across the country. That’s important for us, as we shape financial services policy. But it is also important for firms, as they decide how best to serve their customers.”

The FCA has released weighted data tables which provide details of the survey findings, so that local decision-makers and other organisations can use the information to consider what they can do to help support people who may be struggling financially. The FCA’s previous Financial Lives report told the financial story for six different age groups to show key themes at each life stage.

'Potential vulnerability' refers to those adults who may suffer disproportionately if things go wrong because they have low financial resilience. It also covers those who may be less able to engage with their finances or with financial services. The reasons for this can vary from suffering a recent life event (such as redundancy, bereavement or divorce), low financial capability, or a health related problem that significantly affects a person’s day to day activities. Being defined as potentially vulnerable does not mean someone will necessarily suffer harm.

‘In difficulty’ refers to adults who are the least financially resilient, as they have already missed paying domestic bills or meeting credit commitments in at least three of the last six months.

'Over-indebtedness' is defined as considering a heavy burden keeping up with domestic bills and credit commitments, or missing any credit commitments and/ or any domestic bills in any three or more of the last six months.

* Read the FInancial Lives Survey here

* Financial Conduct Authority


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