FCA reveals urban-rural differences in how consumers experience financial services

Today’s report finds notable differences between urban and rural areas. In rural areas, where there is greater reliance on bank branches, a higher proportion of people have difficulty getting to a bank and tend not to be able to use online banking. However, people in rural areas are more likely to be satisfied with their overall financial circumstances. By contrast, people living in urban areas are less likely to be satisfied with their overall financial position, are more likely to use high-cost loans and on average have higher levels of unsecured debt.

Financial Lives is the FCA’s survey of nearly 13,000 adults and is the largest tracking survey in the UK specifically looking at consumers and their use of financial services. 

The report shows a number of differences in how people in different parts of the UK, including rural and urban areas, experience financial services, such as:

• Difficulty getting to a bank – in rural areas, a higher than average proportion of adults (13%) aged 55 and over, or who are younger and have a long-term health condition, have difficulty getting to a bank. This compares to 9% in urban areas. On top of that, of UK adults who never use the internet, 70% (or 3.7 million people) live in rural areas and the take-up of mobile banking in rural areas (23%) is nearly half that in urban areas (45%).   
• Use of high-cost loans and have more debt - there is a higher concentration of adults with high-cost loans in urban areas (7% or 2.4 million people) than in rural areas (5% or 0.6 million people). Adults’ average unsecured debt is £3,600 in urban areas, compared with £2,510 in rural locations. Those paying for credit are more likely to be in urban areas (49%) compared with rural areas (37%).
• Over half (51%) of retired people in rural areas rely mainly on the State Pension – this is their main income compared to 37% in urban areas.
• Satisfaction with overall financial circumstances: 27% of adults in rural areas are highly satisfied, compared with 20% of adults in urban areas. Satisfaction in London is particularly low with just 16% being highly satisfied with their finances, compared with the national average of 21%. 

Across England, the highest proportion of adults with characteristics of potential vulnerability are found in the North West (55%). This compares to 46% in the South West. Adults in London have the highest levels of over-indebtedness (17% compared to 15% across the UK) and those living in Yorkshire and the Humber are most likely to be ‘in difficulty’ (11% compared to the UK average of 8%).

Just over one in ten of the adult population (13%) have no savings but the report also shows there is a clear North-South divide with more people in the North having no savings. 17% of people in the North West and 16% in the North East have no savings compared to 9% in the South East and 10% in the South West.

Andrew Bailey, FCA Chief Executive, said: “This survey shows just how different the experience of financial services is for consumers across the country. That’s important for us, as we shape financial services policy. But it is also important for firms, as they decide how best to serve their customers.”

The FCA has released weighted data tables which provide details of the survey findings, so that local decision-makers and other organisations can use the information to consider what they can do to help support people who may be struggling financially. The FCA’s previous Financial Lives report told the financial story for six different age groups to show key themes at each life stage.

Nations and regions - press releases

• Northern Ireland[1]
• Scotland[2]
• Wales[3] - fersiwn Gymraeg version[4]
• East Midlands[5]
• East of England[6]
• London[7]
• North East [8]
• North West[9]
• South East[10]
• South West[11]
• West Midlands[12]
• Yorkshire and the Humber[13]

Notes to editors

1. Read the FCA’s June 2018 report on the financial lives of consumers across the UK[14]. 
2. Read the Financial Lives 2017 Report, Understanding the financial lives of UK adults[15]
3. Potential vulnerability refers to those adults who may suffer disproportionately if things go wrong because they have low financial resilience. It also covers those who may be less able to engage with their finances or with financial services. The reasons for this can vary from suffering a recent life event (such as redundancy, bereavement or divorce), low financial capability, or a health related problem that affects a person’s day to day activities a lot. Being defined as potentially vulnerable does not mean someone will necessarily suffer harm.
4. ‘In difficulty’ refers to adults who are the least financially resilient, as they have already missed paying domestic bills or meeting credit commitments in at least three of the last six months.
5. Over-indebtedness is defined as considering a heavy burden keeping up with domestic bills and credit commitments, or missing any credit commitments and/ or any domestic bills in any three or more of the last six months. 
6. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
7. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
8. Find out more information about the FCA.