16 May 2025
If you are covering the FCA’s Financial Lives Survey, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
The FCA’s Financial Lives Survey lays bare the financial tightrope that millions are walking. While the number of people with a bank account has risen and digital exclusion has plummeted, that’s where the good news ends. A tenth of adults still have no cash savings, over a third saving into a pension have less than £10,000, and nearly a quarter are classed as having low financial resilience.
These are not isolated issues – they’re symptoms of a system that too often expects people to make complex financial decisions without access to affordable support or a foundation in financial education.
One solution that must not be overlooked is the FCA’s proposed introduction of ‘targeted support’, a middle ground between full advice and generic guidance that could allow firms to offer help where it's needed most – particularly to those struggling with savings or retirement planning. The Advice Guidance Boundary Review must be a turning point, paving the way for new models of support that are both safe and scalable.
Savings and financial resilience
It’s striking that one in ten adults (10%) have no cash savings at all, and another 21% have less than £1,000, figures that remain stubbornly unchanged since 2022. The median amount saved remains just £5,000–£6,000, which can be quickly eroded in a crisis.
At the other end of the scale, one in five adults have cash savings of £25,000 or more, and around one in ten have savings exceeding £50,000, showing the stark divide in financial resilience across the population. Millions remain just one broken boiler or car repair away from debt reliance.
The FCA rightly highlights that people with low savings are more likely to be overwhelmed by their commitments, with financial fragility widespread – 13.1 million adults (24%) are classed as having low financial resilience. With rent, childcare and food costs still elevated, the capacity to save is being squeezed from all sides.
It’s equally revealing that 61% of people with more than £10,000 in investable assets are holding 75% of this money in cash rather than investments. It speaks to a broader cultural reluctance to invest, and perhaps to a lack of confidence or understanding in navigating financial markets.
This is exactly the kind of behavioural challenge Labour has committed to tackling in its mission to build a stronger culture of investing in the UK. While the proposed British ISA has now been sensible shelved, the conversation has shifted toward how we can use existing products more effectively to encourage long-term investing. Broadening participation in capital markets is sensible and necessary, but any reform must strike the right balance between encouraging investment and protecting savers.
However, product reform alone won’t be enough. The root cause is financial education, or the lack of it. Until people feel confident making informed decisions about risk and reward, investing will remain the preserve of the few. That’s why improving financial literacy from the ground up is critical, alongside ensuring accessible support, whether through guidance, targeted support, or regulated advice.
Debt and credit reliance
High-cost credit use has surged from 2.8 million (5.3%) to 3.5 million adults (6.4%), and Buy Now, Pay Later use has jumped, particularly among lone parents (40%), women aged 25–34 (35%) and Black adults (26%).
Meanwhile, unsecured debt affects 47% of adults, and for those who hold it, the median amount owed is £6,300 —or £2,500 excluding student debt. With household finances squeezed by the lingering cost of living crisis and elevated mortgage rates, more people are turning to credit cards and short-term borrowing to make ends meet.
A growing number are falling back on products that offer convenience but little protection. This underlines why proactive financial education and accessible support is urgently needed before people find themselves trapped in cycles of borrowing.
Pensions and retirement savings
The survey finds a third (33%) of adults saving into a defined contribution pension have pots under £10,000, and more than one in ten have no idea what they’ve saved. That’s a clear indicator that engagement with retirement planning remains low. In fact, only a third of DC pension holders say they have thought a lot about how they are going to manage in retirement, and almost four in ten don’t know how much they or their employer are contributing.
This lack of engagement is troubling. Many people remain unaware of how pensions are taxed, when they can be accessed, or how to convert them into sustainable income in retirement. Without a plan, there’s a risk of withdrawing too much too soon – or being too cautious and not making the most of hard-earned savings.
We also need to acknowledge the limits of auto-enrolment. While it has successfully expanded pension participation, minimum contributions often fall far short of securing a comfortable retirement. Inertia is a powerful force in pensions, people rarely engage unless prompted, and even then the complexity can be overwhelming.
It’s also telling that just 8.6% of people accessed regulated financial advice in the past year, essentially unchanged from 2022. This is the advice gap in action. For many, pensions are the most significant long-term asset they’ll ever own, but without support, they’re flying blind. Reforming the advice/guidance boundary is essential if we want to reach the millions currently underserved.
Confidence and capability
While consumer confidence in financial services has improved modestly since 2017, only 39% of people have confidence in the industry, and just 36% believe firms are honest and transparent. These aren’t figures to celebrate but rather proof that trust remains on a knife-edge.
Meanwhile, 6.5 million people (12%) report low financial capability, leading to stress, delayed decisions and confusion. While 17% of adults have used government-backed guidance services such as MoneyHelper, that still leaves the vast majority without tailored support.
This creates a vicious cycle - low confidence leads to inaction, worsening financial outcomes. Tackling this means building services that are simple, accessible and backed by meaningful support without undue cost or complexity.
Scams and fraud
One in seven adults (14%) experienced a financial scam or fraud in the past year, with card fraud and Authorised Push Payment (APP) fraud leading the list.
This remains a financial resilience issue. Falling victim to fraud can have lasting consequences, particularly for those already struggling with low savings or debt. The FCA’s data shows that younger adults and vulnerable financial individuals are often disproportionately affected, while scammers are becoming increasingly sophisticated in exploiting both digital platforms and psychological triggers.
Firms must not only invest in better fraud detection and consumer education, but also ensure victims receive fast, fair treatment when things go wrong. A strong, trusted financial system depends on more than just security, but on responsiveness and support when customers are at their most vulnerable.
