As millions of Britons struggle with their bills its time to act

Let’s start with a quote that makes very uncomfortable reading:

There has been an increase in people in financial difficulty, with 4.2 million people missing domestic bills or credit repayments in 3 or more of the last 6 months, up from 3.8 million in 2020.

Financial Conduct Authority


A heavy burden

The Financial Conduct Authority (FCA) has found 7.8 million people are finding it a heavy burden to keep up with their bills, this represents an increase of around 2.5 million people since 2020. 

The FCA has published a snapshot of the latest edition of its landmark Financial Lives survey1, which was carried out between February and June 2022.  

This latest survey finds that one in four UK adults are in financial difficulty or could quickly find themselves in difficulty if they suffered a financial shock, and 4.2 million people have missed bills or loan payments in at least three of the six months before the survey took place.  

Earlier this year the watchdog reminded thousands of lenders how it expects them to support customers in financial difficulty and took action with more than 30 firms to make sure customers get the help they need.  

Although the FCA does not yet regulate buy now pay later products, the regulator has engaged with providers to improve customers’ terms and conditions. The FCA also recently warned insurers to protect their customers from unnecessary add-ons and unfair penalties, and states that its upcoming Consumer Duty will set a higher level of consumer protection and require firms to put their customers’ needs first. 

Sheldon Mills, Executive Director, Consumer and Competition said: 

Our research shows that people up and down the country are struggling to keep up with their bills. 

If you are facing financial difficulty, you don’t need to struggle alone. There is free debt advice available, and we have told firms that they must work with their customers to solve any problems with payment.

The FCA continues to remind those in financial difficulty to contact their provider in the first instance to discuss their options, to shop around to find the best deal, and to use the MoneyHelper service for tips on living on a squeezed income and to find free, expert debt advice. 

The survey also found that people living in the most deprived areas of the UK are nearly seven times as likely to be in financial difficulty compared to those living in the least deprived areas. It also found that 12% of people in the North East and 10% in the North West are in financial difficulty, while 6% of people in the South East and South West are in the same position. 


64% think banks and others should do more to help customers through crisis

As millions of Britains struggle with their bills the Belfast Telegraph recently reported that nearly two-thirds of people believe banks and other financial providers should be doing more to help their customers during difficult economic times.

Some 64% of people surveyed said banks and other financial providers are not doing enough to help their customers.

Banks were seen by more than half (57%) of people as having a duty to help people during stormy financial conditions, second only to the Government (64%), according to the survey of 2,000 people across the UK.


Action not consultation

Responding to the FCA’s survey and the report from the Belfast Telegraph, Peter Cornforth Commercial Director at Request to Pay company Answer Pay is calling for action not consultation:

Unfortunately it comes as no surprise that the Financial Conduct Authority has found that 7.8 million people are finding it a heavy burden to keep up with their bills or that 4.2 million people have missed bills or loan payments in at least three of the six months before the survey took place. 

Sadly the regulator has failed to help alleviate the situation despite a separate report stating that nearly two thirds of the public think that banks should be doing more to help people.  Guidance on responsible lending by the FCA is not sufficient to help people pay their bills. 

Contrast this with the rapid increase in highly effective fraud messages targeting, in particular,  vulnerable customers.  Fraud texts and e-mails that once purported to be from delivery companies are now impersonating the government and promising energy rebates.  Whilst the regulators consult, Authorised Push Payment Fraud continues to grow.

Peter Cornforth, Answer Pay


Aren’t Direct Debits the answer to bill payments?

We like Direct Debits.  

For the most part they provide friction free payments.  

However, we recognise their limitations.  

They are mandates that allow a merchant to automatically pull funds from your bank account at a set time every month.  The merchant does not know how much money you have in your account.  If you are low in funds the payment could fail resulting in penalty charges or it could leave you with a very low balance.  

They are also often variable in nature with extreme examples including recent 100% increases in Direct Debit values to some customers. 

This understandably erodes trust leading to movements such as Don’t Pay and the general move to alternative payments such as cash, card or even cheques which are more expensive leading to a poverty premium – those least able to pay their bills pay more to pay them.


What should be done?

Explaining his call for action not consultation Peter Cornforth said:

The regulators need to take action now to help customers pay their bills and stop the tidal wave of authorised push payment fraud.  At Answer Pay we believe that the regulator should be mandating bank implementation of Request to Pay to give consumers choice in who they pay, when they pay and how they pay. 


About Answer Pay

Answer Pay helps banks and payment service providers to grow payments using Request to Pay.

Request to Pay (RTP) is a digitised bill payment experience that makes payment initiation easier for both billers and payers.

Our certified “payments as a service” platform connects banks and financial services to the Request to Pay network. Our clients save money on building new tech infrastructure, refocusing resources on creating differentiated customer experiences in their apps that help grow payment volumes and customer satisfaction.

For more about Request to Pay reach out to Peter Cornforth at Answer Pay

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