# UK banks and insurers told to step up help for struggling customers
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-09-29
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: FCA Urges Banks and Insurers to Support Customers Amid Cost
Meta Description: Learn how the Financial Conduct Authority is pushing banks and insurers to assist customers facing financial hardship during the cost of living crisis. Find out
URL: https://financedigest.com/uk-banks-and-insurers-told-to-step-up-help-for-struggling-customershtml

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By Huw Jones

LONDON (Reuters) – Britain’s Financial Conduct Authority (FCA) told banks and insurers on Thursday to do more to help customers struggling with a cost of living crisis as it investigates 40 banks for dragging their feet.

Interest rates are increasing to quell decades high inflation, with energy, mortgage and food bills also rising faster than wages.

Sheldon Mills, the [watchdog’s head of competition](https://www.financedigest.com/uks-competition-watchdog-to-examine-edf-buying-ges-nuclear-turbine-unit.html "UK’s competition watchdog to examine EDF buying GE’s nuclear turbine unit") and consumers, said that in May over nine million people had too much debt, up by two million since 2020.

We’ve told lenders that we expect them to support struggling customers, particularly as they have the data to spot the [warning signs first,” Mills told a City & Financial](https://www.financedigest.com/digital-pound-could-hit-financial-stability-and-erode-privacy-uk-lawmakers-warn.html "Digital pound could hit financial stability and erode privacy, UK lawmakers warn") conference.

We have identified 30 firms that [need to do more to help struggling](https://www.financedigest.com/struggling-banks-need-to-modernise-and-improve-software-quality-management.html "Struggling Banks Need to Modernise and Improve Software Quality Management") customers and will investigate the activities of 40 more,” Mills said.

While we will intervene where we see bad practice, I [know that the majority are doing the right thing.”](https://www.financedigest.com/3-things-you-didnt-know-about-trading.html "3 Things you didn’t know about trading")

There was also a risk of people not renewing insurance policies to [save money](https://www.financedigest.com/how-to-save-money-for-a-car.html "How to save money for a car"), leaving themselves unprotected.

The last [thing you want is your roof leaking or a flood and you have no insurance](https://www.financedigest.com/ten-things-youre-doing-that-are-invalidating-your-car-insurance.html "TEN THINGS YOU’RE DOING THAT ARE INVALIDATING YOUR CAR INSURANCE") during a cost of living crisis when your mortgage is going up,” Mills said.

The FCA on Thursday wrote to heads of insurers, [saying they should help to avoid](https://www.financedigest.com/uk-to-avoid-recession-this-year-but-outlook-still-weak-bcc-says.html "UK to avoid recession this year but outlook still weak, BCC says") policy cancellations or consider waiving policy cancellation fees.

Mills said the watchdog was holding weekly discussions internally on fallout from the cost of [living crisis](https://www.financedigest.com/indefensible-uks-sunak-under-fire-over-response-to-cost-of-living-crisis.html "‘Indefensible’: UK’s Sunak under fire over response to cost of living crisis") given that over two million people on variable rate mortgages are seeing immediate increases to their borrowing costs.

Over three million [customers have fixed rate deals that are due to expire in the next two years](https://www.financedigest.com/2019-year-customers-take-control-payments.html "2019: The year customers take control of payments"), meaning they face a big hike in monthly payments.

We are monitoring developments [closely and will be working with industry to ensure that consumers](https://www.financedigest.com/citigroup-says-will-close-russian-consumer-commercial-business.html "Citigroup says will close Russian consumer, commercial business") are treated fairly during this period,” Mills said.

People with [savings should see greater nominal returns due to higher](https://www.financedigest.com/five-reasons-to-start-saving-early-for-higher-education.html "Five Reasons to Start Saving Early for Higher Education") rates.

Mills said the FCA expected [banks to explain clearly to the watchdog how they decide on the pace at which they pass on rate](https://www.financedigest.com/ecbs-villeroy-rate-hike-signals-strong-confidence-in-european-banks.html "ECB’s Villeroy: rate hike signals strong confidence in European banks") increases to savers.

(Reporting by Huw Jones; Editing by Alison [Williams and Mark Potter)](https://www.financedigest.com/youre-a-woman-harry-brits-back-game-of-thrones-maisie-williams-to-play-potter.html "You’re a woman, Harry! Brits back Game of Thrones’ Maisie Williams to play Potter")


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