The report, which uses data from the Office of National Statistics, describes this crisis in financial resilience as ‘a cause of misery, instability and unfulfilled potential for millions of our citizens’. It quotes further striking statistics from the Financial Conduct Authority, showing the number of people lacking financial resilience has risen significantly in recent years, with the January 2023 figure demonstrating that almost 19 million people are not coping financially.
The BRHG has researched financial insecurity in UK households since 2016. Their latest report gathered interview data from key stakeholders, including financial institutions, employers, politicians, and those providing front-line help to struggling families, to explore what can be done to help UK households become more financially resilient.
The report recommends that the Government establish an independent Commission on Household Financial Security, following a model similar to that of the Pensions Commission. It says the body should consist of a small group of commissioners with experience and professional expertise relating to household finances, employer and employee perspectives, financial services and consumers. Its responsibilities would include assessing the current and future state of household financial security in the UK, and recommending how improvements might be made. This would involve broad consultation and the production of a final report within two years of the Commission’s formation.
Other recommendations from the report include:
• A requirement for employee benefits such as sickness and maternity pay to be published in annual business reporting, to provide greater transparency and drive good practice since employers have a responsibility to the wellbeing of their staff and they have the ability to support the resilience of their employees.
• Renters in receipt of Universal Credit (UC) to receive benefit from any Income Protection policy they may have, as UC does not cover full rental payments in most cases. It is suggested this would reduce pressures on the State and Local Authorities and address the current inequitable treatment of renters when compared to mortgage holders.
Dr Matthew Connell, Director for Policy and Public Affairs at the PFS, said: “This report shows that the resilience challenge strikes at the heart of the contract between individuals and society - hard work should be rewarded with security, but too many are falling through the net. There is an urgent need for a commission to set out the issues and potential solutions, in the same way that the Pensions Commission did in the 2000s.”
The full Building Resilient Households Group report can be accessed here.