The Financial Conduct Authority (FCA) and MoneyHelper are urging consumers to get help as soon as possible if they are struggling financially because of the rising cost of living.
New research suggests many borrowers are missing out on available support. The research reveals some people who are struggling financially are not seeking support because they are embarrassed. 42% of borrowers who were struggling and ignored their lenders’ attempt to contact them had done so because they felt ashamed. 40% who were struggling financially incorrectly thought simply talking to a debt adviser would have a negative impact on their credit file.
79% of people in financial difficulty who used debt advice would recommend it and 70% said it had been more helpful than they had anticipated.
52% of borrowers in financial difficulty waited more than a month before seeking help. Of these, 53% regretted not doing so sooner. This feeling of regret became stronger the longer people waited after first experiencing difficulties, increasing to 67% among those who waited more than six months.
In response to the research, the FCA and MoneyHelper are urging consumers to contact their lender if they are struggling to make their payments. The FCA recently reminded lenders of how they should provide customers with help and support that takes account of their individual needs and circumstance if they are struggling with their payments. Where appropriate, this can include agreeing reduced or no payments for a period.
The two organisations also say consumers should contact Contact MoneyHelper if they are worried about money. The government backed service can help people find a way forward whether it is living on a squeezed income, working out how to prioritise bills and payments, or access to free, expert debt advice.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “Anyone can find themselves in financial difficulty, and the rising cost of living means more people will struggle to make ends meet. If you’re struggling financially the most important thing is to speak to someone. If you’re worried about keeping up with payments, talk to your lender as soon as possible, as they could offer affordable options to pay back what is owed.”
Caroline Siarkiewicz, chief executive of the Money and Pensions Service, added: “We know many people are currently feeling increasingly worried about money as the cost of living rises and many may turn to different forms of borrowing to help. Talking about money is more important than ever and makes many realise that they are far from alone.
“Taking the first step in talking about money problems can be the hardest to take but in doing so can help those get the support they need to find a way forward.
“Our MoneyHelper website provides guidance on maximising your income as well as practical help on how to talk to creditors. For those who are already struggling to keep on top of bills and financial commitments, we suggest seeking free debt advice immediately. The Debt Advice Locator Tool on the MoneyHelper website can help you find a suitable debt adviser.”
