Urban-rural divide in how consumers experience financial services revealed


People living in the countryside are less likely to be overdrawn or unable to clear their credit card balance each month than those in urban areas - but they may have a tougher struggle accessing banking services - a survey suggests.

A large-scale consumer survey from the Financial Conduct Authority (FCA) looked at the urban-rural divide when it comes to how people manage their money.

In rural areas, 13% of adults aged 55 and over, or who are younger and have a long-term health condition, have difficulty getting to a bank, according to the FCA's large-scale financial lives survey.

This compares with a figure of 9% in urban areas.

On top of this, 70% of UK adults who never use the internet live in rural areas.

Take-up of mobile banking in rural areas (23%) is nearly half that in urban areas (45%), according to the survey of nearly 13,000 people.

Meanwhile, people living in urban areas have bigger non-mortgage debts on average - and are also more likely to use high-cost loans.

In general, people living in rural areas tend to be older than those in urban areas and are more likely to be retired.

In urban areas, 7% of adults have high-cost loans, compared with 5% of adults living in rural areas.

Adults' average unsecured (non-mortgage) debt is £3,600 in urban areas, compared with £2,510 in rural locations.

More adults in urban (27%) than rural (20%) areas have been overdrawn in the last 12 months, the survey found.

And more adults in urban (20%) than rural areas (14%) have a credit card and do not pay off the balance every or most months.

Over a quarter (27%) of adults living in the countryside are highly satisfied with their financial circumstances overall - compared with 20% of adults living in towns and cities.

The report also found that across England, the highest proportion of adults with characteristics of potential vulnerability are found in the North West (55%).

People are seen as potentially vulnerable if they may suffer disproportionately if circumstances deteriorate, due to a low financial resilience.

This could be because they have a low financial capability, a health-related problem or they have recently suffered a life event such as a as redundancy, bereavement or divorce. Being defined as potentially vulnerable does not mean someone will necessarily suffer harm.

Meanwhile, adults in London have particularly high levels of over-indebtedness, at 17% compared with 15% across the UK and those living in Yorkshire and the Humber are most likely to be classed as in difficulty, at 11% compared with the UK average of 8%.

People may be considered over-indebted if they find it a heavy burden keeping up with household bills and credit commitments, or if they have missed credit commitments or bill payments in any three or more of the previous six months.

People described as being in difficulty are seen as the least financially resilient, having already missed paying domestic bills or meeting credit commitments in at least three of the last six months.

Andrew Bailey, FCA chief executive, said: "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."