Middle income earners are increasingly falling into financial precarity, according to a report published today by Plend and investment manager Triple Point.
The research found that 40% of those unable to cover a sudden £300 bill, the FCA's own benchmark for financial resilience, are now earning above the national median salary.
The report shows that financial insecurity in the UK is no longer confined to the lowest earners, but it is increasingly reaching the squeezed middle, households on comfortable incomes who would never have counted themselves as financially vulnerable. The report frames this as a structural shift rather than a passing squeeze.
A third of UK adults (35%) are borrowing simply to cover essentials such as food, heating and rent, and 89% say they have felt the impact of the cost of living crisis over the last year, up from 84% the year before.
Among people earning £40,000 to £80,000, 36% say their finances have worsened over the past year, far closer to the 49% of those under £40,000 than the 22% of those over £80,000. A third of UK adults are now borrowing simply to cover essentials such as food, heating and rent.
Demand is increasingly met outside the mainstream, with 23% using BNPL, up 10% year on year, and around two million people reporting use of an illegal lender.
The appetite for a solution is clear: 37% of UK adults say access to a genuinely low interest loan would improve their finances, rising to 58% among 18 to 34 year olds.
The report recommends embedding open banking into mainstream credit assessment through the National Financial Inclusion Strategy, so lenders judge people on real financial behaviour rather than a historic score, and asks the FCA and lenders to treat the poverty premium as a measurable outcome under Consumer Duty.
Lindsay Smart, head of sustainability and product at Triple Point, commented: "This year's findings show that financial precarity is no longer confined to the margins. It is reaching people on living wage salaries who are turning to credit simply to cover the essentials, and that should concern everyone with a stake in the health of the UK economy.
"At Triple Point we believe private capital has a role to play in closing this gap. Supporting lenders who assess borrowers on the reality of their finances, rather than the limitations of a credit file, is both the responsible thing to do and a sound long term investment."
