Salad Money Impact Report 22-23 WEB - Flipbook - Page 6
GROTESQUE
AND UNFAIR
Because of the rising cost of living, in January 2023
nearly nine out of ten adults had cut back on spending
over the previous six months.
Most people had seen their 昀椀nancial
situation worsen, and over a third
were 昀椀nding it impossible or
di昀케cult to cope 昀椀nancially.1
The proportion of adults in
昀椀nancial di昀케culty and/or 昀椀nding
it a heavy burden to pay their
bills increased from 18% (9.6m) to
24% (12.8m) between May 2022 and
January 2023.2
3.8 million adults (7%) were refused
one or more 昀椀nancial products or
services in the two years to May
2022, and 6.8 million adults (13%)
avoided applying for a 昀椀nancial
product or service because they
thought they would not be eligible,
they would not be able to a昀昀ord the
product or their application would be
rejected.3
Around 6 million people are
“credit invisible”4 – if they apply for
a loan, many lenders automatically
reject them. Others give them an
estimated score based on factors
including their postcode, so they are
judged based on where they live,
a less fair metric than their income,
expenses, and whether or not they
can a昀昀ord to repay a loan.
The proportion of adults with low
昀椀nancial resilience has increased
from 22.8% in 2020 to 24.4% in
2022.5
21% of adults with low 昀椀nancial
resilience use high-cost credit and
loans compared with 10% of UK
adults. Black adults are twice as
likely as the national average to have
high-cost credit or loans (20% vs.
10%); women are more likely (28%)
than men (21%) to have low 昀椀nancial
resilience.6
Around 3 million people are
now estimated to be borrowing
from illegal moneylenders / loan
sharks.7 2.6 million low-income
households hold high cost credit
loans with loan sharks, doorstep
lenders, payday lenders or
pawnshops; 5.5 million low-income
households have had to cut down
on or skip meals because they
can’t a昀昀ord food.8
The gap in provision of appropriate,
fair and a昀昀ordable credit to people in
昀椀nancially vulnerable circumstances
is predicted to rise to at least £3bn
by 2025.9
Financial Conduct Authority Financial Lives 2022, published August 2023. 2ibid. 3ibid.
Responsible Finance and Salad Projects, April 2023. 5Financial Conduct Authority Financial Lives 2022, published August 2023.
6
ibid. 7Research by IPSOS for Fair4All Finance, June 2023. 8JRF Cost of Living Tracker, Summer 2023. 9Fair4All Finance, 2023.
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Fair Lending for Key Workers
