Johnny Timpson
One in 10 people in Britain have zero savings, FCA says
Thanks to Reuters and Johnny Timpson.
One in 10 people in Britain have zero cash savings to draw on in an emergency, according to figures published on Friday by the UK’s top financial watchdog, in findings that underscore the financial vulnerability of millions.The Financial Conduct Authority said another 21% of people have less than 1,000 pounds in savings and that 1.6 million, or 3% of homeowners, had received support from mortgage or credit lenders to manage repayments in the last two years.The data makes sobering reading for Britain’s banks and the policymakers tasked with steering a UK economy rattled by inflation, a cooling jobs market and the threat of a global trade war sparked by U.S. President Donald Trump’s tariff hikes.The Bank of England’s Monetary Policy Committee was split three ways on its May interest rate decision, seven of the nine members backing cuts to reduce the cost of borrowing and keep the economy on track.Almost two-fifths of adults have unsecured debts, with a median amount of 2,500 pounds, the FCA said.“Our data shows that finances are stretched for many – with some unable to save for a rainy day. And we know that some do not have the confidence to invest,”said Sarah Pritchard, Executive Director of Consumers and Competition at the FCA.
The FCA’s survey also found that one-third of adults with a defined contribution pension have less than 10,000 pounds saved, while another 12% didn’t know the size of their retirement pots.Only 8.6% of people received financial advice on investments, pensions or retirement planning in the previous 12 months and around 900,000 adults were classed as “unbanked” in 2024, although this was down from 1.1 million in 2022.The FCA said it was working to improve access to financial services help, guidance and advice so that people struggling with debts can build a more financially resilient future.“The FCA’s Financial Lives Survey lays bare the financial tightrope that millions are walking,”Rachael Griffin, tax and financial planning expert at Quilter, said.“It speaks to a broader cultural reluctance to invest, and perhaps to a lack of confidence or understanding in navigating financial markets,”she added.
My friend Johnny Timpson says on Linked In
Sobering reading and a wake call re the extent of UK financial insecurity, vulnerability, exclusion and risk transfer plus our growing national pension inadequacy … It underscores need for a national financial inclusion and resilience strategy together with a fit for purpose welfare safety-net.
Johnny isn’t moaning, he has specific recommendations
As hashtagBuildingResilientHouseholdsGroup Chair and a member of a number of groups focused on transforming consumer financial inclusion, wellbeing, resilience and protection this survey serves little purpose if we do not act on its findings.I respectfully suggest to Rt Hon Rachel Reeves and Emma Reynolds that the Money and Pensions Service together with its UK Financial Capability Strategy is brought back into HM Treasury sponsorship asap plus, that a national financial resilience workplace covenant supported by an independent commissioner is established with it requiring workplace and pension scheme partnership with MoneyHelper.In addition, with many of us increasingly having both DC and DB pension pots, merge the TPR and FCA.
And Trump has initiated Brexit on steroids. Which will make the poor poorer
https://youtu.be/7XA4N0fQicU?si=SFielavJ_wAD6X-c
In the UK HMRC define wealthy as an income of £200K a year or worth £2m and only 2% are in this group yet they pay 25% or 34% of the income tax depending on which report you read. 24 million pay no IT at all.
So how will a commission help?
A joint life RPI indexed annuity for Male 77 female 67 starts at $42,000 a year for £1,000,000 after tax (£5886) thats £36,114. A living wage is about £24,000 pa.
That is preparing for a three stage life when we should be planning for 100 year life, working longer extending the period of active life, there is no magic money tree.
Why are you looking backwards to polish the structure of the failed system?