One in three adults battle to access credit from lenders | moneyfacts.co.uk

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Michael Brown

Content Writer
Published: 29/04/2022

Number of people struggling to access credit increased by 50% in six years.

There are 20.2 million UK adults who may have difficulty accessing credit from mainstream lenders according to fintech company TotallyMoney and accounting firm PWC.

This is likely due to minor adverse credit history, volatile incomes which can impact affordability assessments, or minimal credit history. People who fall into this category are often referred to as “under-served.”

“The findings show the underbelly of a broken market – and it’s too big a problem to ignore,” said Alastair Douglas, CEO of TotallyMoney.

The category of “under-served” borrowers has grown by 50% over the last six years. In addition, a further 8.9 million are “financially fragile”, and are at risk of adding to the number.  

“An alarming rise in the under-served group, and millions more treading water, is not just a symptom of the pandemic and the worst cost of living crisis in a generation, it’s also because the credit market is archaic; built to keep data in the hands of companies, not the people it belongs to,” said Douglas.

It is a view shared by Simon Westcott, Strategy & UK Financial Services Lead at PwC UK, who also calls for the financial services industry to offer greater support.

“There is an opportunity for lenders to enhance existing propositions and deliver new solutions that truly meet the needs of this big and diverse segment of society,” he said.

Under-served characteristics

According to the findings from TotallyMoney and PWC, the under-served population tends to be no older than 45 and have a lower gross personal income between £27,000 and £34,000 per year.

In addition, these people typically have lower savings that can be used if their credit spirals out of control.

Those looking to start a savings account to improve their financial status, can consider using our charts to find the highest earning deals possible.

From easy access accounts to fixed rate bonds, we update these charts daily to keep up to date with the most relevant information.

Credit building cards

If you are in the market for a credit card, but you are concerned about your credit score, consider a credit builder card.

These cards are usually given to those with a limited or no credit history. As a result, the interest rates are typically higher and credit limits lower than other options on the market.

Of note, credit builders can consider NewDay Ltd’s Amazon Classic Mastercard which has a 0% introductory interest rate for purchases made in the first three months. After this period has expired, interest will revert to an APR of 29.9%.

Other similar deals can be found via our tables too.

However, before applying for any form of credit card make sure you know your credit score. This can be done for free by using TotallyMoney’s credit eligibility checker.

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