Key Takeaways:

• 7.4 million adults struggled to pay their bills in January 2024
• 1 in 9 people have no disposable income
• Interest rates are at their highest level in the 16 years in an effort to slow inflation

A survey conducted by the Financial Conduct Authority (FCA) showed that roughly 7.4 million adults struggled to pay their bills in January 2024. This number has decreased from the 10.9 million recorded in January 2023. The number remains marginally higher than the 5.8 million recorded in January 2020.

The spike in 2023 was due to several factors, including the consequences of a post-COVID era, the cost of living crisis, and Russia’s invasion of Ukraine.

The FDA claims that 1 in 9 people have no disposable income. The proposed 1 in 9 of the population (5.5 million) had missed at least one credit repayment or bill due to be paid in the last six months.

Borrowing money has also become difficult, as interest rates are at their highest level in the last 16 years in an effort to slow inflation. Less money borrowed from banks due to high interest rates reduces overall consumer spending, lowering demand for goods and forcing prices down. This aims to combat the cost of living crisis.

The FDA has urged people to seek help from lenders and financial advisors. They expect these firms to step up and meet the needs of customers. Around 2.7 million sought help from a lender or financial support charity in the 12 months leading up to January.

However, many are still optimistic to hear of the decrease from 2023 and hope to see further improvement.

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