FCA reveals financial strife of urban and rural life
The UK’s Financial Conduct Authority (FCA) has published the results of its “Financial Lives” survey, which highlights the notable differences between urban and rural areas.
Customers in rural areas struggle reaching both branches and online banking services, according to the survey, in spite of their higher levels of satisfaction regarding their finances.
By contrast, urbanites are more likely to use high-cost loans and on average have higher levels of unsecured debt.
Financial Lives surveyed nearly 13,000 adults and is the largest tracking survey in the UK specifically looking at consumers and their use of financial services.
Andrew Bailey, FCA chief executive, says: “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.”
Access to banking
The report shows that 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, compared to 9% in urban areas.
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%).
Loans and 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%).
Nearly six in ten (57%) UK adults have no cash savings or savings of less than £5,000. The same is true for two thirds of adults in Northern Ireland (67%) and the North East (66%), but for only half (52%) of adults in the East of England and in the South East.
Seven in ten (71%) UK adults have no investments at all, ranging from 65% in the South East to 78% in Northern Ireland.
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.
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%.
Other highlights include the fact that 3% of UK adults are unbanked. The same is true of 4% of adults in London.
Of all those that are unbanked, 20% are in London, 14% in the North West, 12% in the West Midlands and 11% in Scotland.
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%), but, in comparison, 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.
Of 40% of UK adults are confident in the UK financial services industry, and only 31% feel that financial firms are honest and transparent. Differences by nation and region are marginal.
You can read the full report here.