Half of adults in the UK display at last one characteristic signalling their potential vulnerability to financial harm, according to the Financial Conduct Authority (FCA).
Vulnerability, stated the the FCA in its Financial Lives survey published today, is often experienced by consumers who are less able to engage with their finances or financial services. Characteristics include low financial capability, low financial resilience, poor physical or mental health or a disruptive life event.
More women than men display these traits, with 53 per cent of women showing signs of vulnerability compared to 46 per cent of men. Meanwhile, the highest proportion of people with characteristics of vulnerability are among the so-called unbanked and the unemployed looking for work.
“The findings give us a wealth of information which will be used to increase our knowledge and understanding of the issues affecting consumers and how to best protect them,” said the FCA's chief executive Andrew Bailey.
The report also revealed just 35 per cent of adults aged 45 to 54 have given substantive thought to as to how they will manage in retirement.
A further 15m are not saving into a pension at all and more still are “undersaving”.
“The review of [pension] auto-enrolment, due to report by the end of the year, must address what is clearly a huge gap in the nation’s savings policy,” said Kate Smith, head of pensions at retirement planning firm Aegon.
The FCA noted that single parents aged between 18 and 34 are three times more likely than the UK average to use high-cost loans, while 13 per cent of 25 to 34 year olds were described as being “in difficulty” because they have missed paying domestic bills or meeting credit commitments in three or more of the last six months.
“We hope that the research will provide valuable insight for other organisations focusing on consumers and finance,” said Bailey.