Over 8 million UK adults financially 'fragile' according to research as unsecured debt tops £400bn

  • Study shows that 8.9m UK adults show signs of financial fragility according to research by PwC UK and TotallyMoney

  • In addition, the total amount of unsecured debt now exceeds £400bn, meaning that an average UK household is set to owe just over £16k in unsecured debt

  • Data also reveals a 50% increase in UK adults who are likely already locked out of mainstream banking services (13.6m 2016 vs 20.2m 2022) and are therefore 'under-served' 

Data from PwC and TotallyMoney has found that 8.9m UK adults show signs of financial fragility which is defined as those who may need to use their overdraft to cover everyday spending such as the food shop. They may also struggle to make repayments on their borrowing in the next year.

In addition, fresh analysis by PwC also shows that the total amount of unsecured debt now exceeds £400bn, which equates to a record high of £16,200 per household. In the past year alone, unsecured household debt has grown by >£1,000, or an annual growth rate of 7.2%. This is a steep increase in comparison to 2016 when UK households were set to owe close to £10,000 in unsecured debt by the end of that year, which was, at that time an all-time high.

The data by PwC and TotallyMoney also shows that over 20 million adults are currently under-served by high street lenders either due to having a  thin credit file / minor adverse credit history, holding a near prime credit card or perceiving themselves to be under-served. On average, the under-served population tends to be younger than those who are not under-served (45 vs. 51 years old) and typically has a lower gross personal income (£27k vs. £34k per annum).

Isabelle Jenkins, Leader of Financial Services at PwC UK, said:

“The results are startling and it's clear that for UK households struggling with post christmas debt, the outlook may feel challenging.
“For most borrowers, credit performs an important function, smoothing income and expenditure, which, if affordable, can be beneficial. However, unaffordable lending and borrowing can cause real harm to individuals and society, and vulnerable consumers can be disproportionately affected. 

“However there are ways in which consumers can get a grip on their finances, for instance, for those finding it difficult to pay their mortgage, credit card or personal loan, your lender should be able to give you support tailored to your circumstances. This support will be available if you’re struggling for the first time or if you’ve already had help.  

“Your options could include making reduced payments for a temporary period, changing your mortgage or loan terms to make your payments more affordable  and being directed to sources of free debt advice.

“For consumers who are struggling, they have the option to contact their bank as soon as possible, keeping in mind that talking to your lender will not affect your credit file, and they can support you.”

Simon Westcott, Strategy& UK Financial Services Lead at PwC UK, said:

“There is no doubt that the long tail of the pandemic plus the rising cost of living has put a significant strain on people’s financial health, and after Christmas, the prospect of reflecting on post festive season spending can put a significant strain on families. 

“The rising levels of unsecured debt plus UK household’s vulnerability to interest rises, could leave consumers over stretched.

“However, there is an opportunity for lenders to continue to create and develop products and services  that truly meet the needs of consumers in this potentially challenging time.

“In addition, the Consumer Duty, due to be implemented in the new year, will set clearer standards of consumer protection across financial services therefore we expect a major shift which will ideally promote competition and growth based on high standards.”


Notes to editors

PwC Strategy& analysis shows that the total amount of unsecured debt now exceeds £400bn, which equates to a record high of £16,200 per household. In the past year alone, unsecured household debt has grown by >£1,000, or an annual growth rate of 7.2%

To calculate the overall size of the ‘under-served’ population, a set of mutually exclusive groups were developed based on their survey responses, and the results were then extrapolated to the total UK population. 

The questions posed are a continuation from a PwC survey conducted in 2016, enabling an estimate for how this population has changed in size. PwC estimates there to be approximately 20.2m financially under-served adults in the UK in 2022. 

This means that at least 1 in every 3 adults may have difficulty accessing credit from mainstream lenders. Applying the same definitions, this figure is 50% larger than it was in 2016, when there were 13.6m financially under-served adults. 

PwC Strategy& was commissioned by the credit app TotallyMoney to size and characterise the financially under-served population in the UK. Given the characteristics of this segment, there is no definitive, publicly available data to size it. As a result, PwC ran a bespoke customer survey of >2,000 UK adults with YouGov in January 2022. 

The survey provides a statistically significant representation of the UK population, at greater than a 95% confidence level. To be defined as “financially under-served”, respondents needed to meet some basic eligibility criteria (to screen out those who are unable to borrow e.g. deep subprime or unbanked) and at least one of three definitions.

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