Half of adults are living in financially vulnerable circumstances in 47 local authorities

A two-year study by Fair4All Finance has identified that more than half of adults are living in financially vulnerable circumstances in 47 local authorities across the UK.

The research identifies rising living costs, low or unstable incomes, persistent debt and a lack of ‘safety nets’ such as insurance, credit and savings among the factors which leave millions of households living in financially vulnerable circumstances.

Across the UK, London and the North East emerge as the regions where financial vulnerability is most common, with almost half of both populations affected (46%) closely followed by the West Midlands (42%).

While London (38%) and the North East (41%) were also the worst affected in 2022, the North/South divide has evaporated with London seeing a bigger rise in financial vulnerability in the last two years.

London also features the most local authorities (12) where more than half of adults are living in financially vulnerable circumstances, including two neighbouring areas which are the hardest hit of all 361 local authorities in Fair4All Finance’s study: Barking and Dagenham (73%) and Newham (69%). These local authorities have a significant proportion of families in a ‘crisis position’, who are trapped in a cycle of credit and debt in order to afford necessities, with lower household incomes and savings as well as higher food bank usage.

Sandwell in the West Midlands (68%), Kingston upon Hull in Yorkshire and the Humber (62%) and Harlow in the East of England (59%) also rank among the five areas where financial vulnerability is most severe.

Fair4All Finance’s findings show how the scale and severity of financial vulnerability has grown in every part of the UK, as high living costs leave more people facing difficulties and add pressure to those who were already at risk.

Nationally, a 16% rise since 2022 means at least 20.3 million people are now living in financially vulnerable circumstances, up from 17.5 million, with 2.7 million people falling into difficulties.

Regionally, Wales (24%), London (21%) and Northern Ireland (21%) have seen the biggest increase in the number of adults facing financial difficulties over the last two years.

At a local level, there are more signs of a North/South divide evaporating with London and southern regions dominating the list of local authorities which have seen the sharpest rise in financial vulnerability.

Waltham Forest (London) has witnessed the biggest increase in the number of financially vulnerable residents, with a 51% rise: three times the national average.

Cambridge in the East of England (46%), Crawley in the South East (46%) Luton in the East of England (39%) and Redbridge in London (38%) have also seen conditions deteriorate the most. [See table 1 in appendix for local authorities with the highest increase in financial vulnerability].

Diane Burridge, Interim Director of Innovation and Development at Fair4All Finance said “Financial vulnerability is a reality that registers with millions of people in all corners of the nation. Inflation has eaten away at the spending power of people who were already struggling to get by, as well as those who have fallen into difficulty for the first time.

”Everyone needs access to financial products to go about their daily lives, manage their money and be economically active. Yet millions of people are locked out of the financial system, unable to access safety nets that others rely on, like credit, savings or insurance.

“Our findings leave no room for doubt that the current financial services system is not working for everyone. Industry and policymakers must unite to address the increasingly desperate situation facing millions of adults in financially vulnerable circumstances.

“For people who are financially excluded, many could look to make more use of credit unions and community development finance institutions (CDFIs) in their communities. These organisations are a vital source of support for communities and households who have been rejected by mainstream banks. They provide a range of innovative products that are tailored to people that might be in financial difficulty, helping people to become more resilient and change their relationship with money.

“No-one should be left to fend for themselves when credit unions and CDFIs have their doors open. We urge more people to seek out support from trusted organisations in their local communities, rather than struggling in silence or taking high risks with illegal money lenders.”

Regional populations living in financially vulnerable circumstances and increases per region since 2022

Rank	Region	No. of adults affected now	No. of adults affected – 2022	% of adults affected now	% of adults affected – 2022	Change (actual)
1	London	3,230,196	2,651,507	46%	38%	24%
2	North East	970,738	880,788	46%	41%	21%
3	West Midlands	1,961,876	1,661,290	42%	35%	21%
4	North West	2,428,613	2,038,184	41%	35%	19%
5	Yorkshire & Humber	1,789,993	1,591,823	41%	36%	18%
6	East Midlands	1,432,726	1,272,825	37%	33%	17%
7	Scotland	1,593,148	1,563,896	36%	34%	17%
8	Northern Ireland	519,623	442,302	35%	29%	15%
9	East of England	1,721,185	644,497	34%	27%	13%
10	Wales	838,573	1,473,065	33%	30%	12%
11	South East	2,351,249	2,013,979	32%	28%	10%
12	South West	1,481,608	1,284,599	32%	28%	3%

UK local authorities where adults are most likely to face financially vulnerable circumstances

Rank	Local authority	Region	% of adults impacted
1	Barking and Dagenham	London	73%
2	Newham	London	69%
3	Sandwell	West Midlands	68%
4	Kingston upon Hull	Yorkshire and The Humber	62%
5	Harlow	East of England	59%
6	Greenwich	London	59%
7	Leicester	East Midlands	59%
8	Sunderland	North East	58%
9	Norwich	East of England	58%
10	South Tyneside	North East	58%