Lowell’s Financial Vulnerability Index

Unveiling the realities of financial health in the UK

 

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The Financial Vulnerability Index is a powerful tool designed to measure and monitor financial resilience both nationally and locally across the UK. Developed by Lowell in partnership with Opinium, the index combines Lowell’s Customer data with publicly available metrics to provide this one-of-a-kind view of financial resilience.

The tool enables policymakers, local authorities, and other key stakeholders to gain deep insights into the financial wellbeing of their communities, helping them make informed decisions to enhance financial resilience.

Users can access detailed Financial Vulnerability Index scores, along with their key components, for any county or parliamentary constituency, with quarterly data available since 2017.

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Overall FVI score

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Late arrears

0 %

Average credit use

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Adults in default

0 %

Social benefits

0 %

Without emergency savings

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The three important findings of the latest wave of the Financial Vulnerability Index are:

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Savings crunch contributing to people feeling worse off

 

The FVI Survey reveals 59.2% of UK adults lack sufficient emergency savings, up from 55.7% nearer the beginning of the pandemic. The reduction in savings, coupled with the economic climate, has led to a perceived deterioration in financial situations in 2023. Nearly half (46%) feel worse off, with only 22% experiencing improvement. Looking ahead, 33% expect further even decline and while 35% expect no change.

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Housing type and cost behind rising financial vulnerability


Financial vulnerability surged in areas with many private renters, apparently driven by soaring housing costs, particularly in London and parts of southern England. Constituencies with above-average house prices saw increased financial vulnerability, especially in London, echoing this trend. In contrast, many urban areas in northern England are cushioned by large numbers social housing units, mitigating some of increasing in financial vulnerability.

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Poor access to good work a driver of financial vulnerability

 

In constituencies with above-average low employment, financial vulnerability rose significantly in 2023. When over 1 in 10 individuals were economically active but unemployed or worked under 15 hours weekly, the FVI score increased. This indicates heightened vulnerability for those with low income from work, especially in outer London, smaller cities, and towns in the south and east of England.

How do we pull the index together?

We’ve built the index using data from Lowell’s customer database, the FCA Financial Lives Survey, NOMIS, and recent research by Opinium. The index looks at the following key measures:

  • Consumers in default (from Lowell)
  • Consumers in late arrears (from Lowell)
  • Average credit usage (from Lowell)
  • Consumers claiming social benefits (from NOMIS)
  • Consumers using alternative financial products (from Opinium)
  • Consumers without emergency savings (from Opinium)

 

Lowell’s data includes over 8 million records, which are analysed at a parliamentary constituency level and then used to create regional and national views of financial vulnerability.

We’d love to talk to you about the index and how we pull it together, contact us at  parliament@lowellgroup.co.uk

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