Rural people 'more financially vulnerable' than urban counterparts

British people living in rural areas are more financially vulnerable compared to their urban counterparts, according to new research.

The Financial Conduct Authority (FCA) has put the spotlight on the financial situation of people across the UK and highlights where in the UK people may be more vulnerable.

The research has revealed major urban and rural differences in how consumers experience financial services.

It shows that in rural areas, where there is greater reliance on bank branches, a higher proportion of people have difficulty getting to a bank and tend not to be able to use online banking.

However, people in rural areas are more likely to be satisfied with their overall financial circumstances.

By contrast, people living in urban areas are less likely to be satisfied with their overall financial position, are more likely to use high-cost loans and on average have higher levels of unsecured debt.

The FCA’s survey of nearly 13,000 adults is the largest tracking survey in the UK specifically looking at consumers and their use of financial services.

The report shows numerous differences in how people in different parts of the UK, including rural and urban areas, experience financial services.

Debt and internet

A higher than average proportion of adults (13%) aged 55 and over, or who are younger and have a long-term health condition, have difficulty getting to a rural-based bank. This compares to 9% in urban areas.

On top of that, of UK adults who never use the internet, 70% (or 3.7 million people) live in rural areas and the take-up of mobile banking in rural areas (23%) is nearly half that in urban areas (45%).

Use of high-cost loans and have more debt - there is a higher concentration of adults with high-cost loans in urban areas (7% or 2.4 million people) than in rural areas (5% or 0.6 million people).

Adults’ average unsecured debt is £3,600 in urban areas, compared with £2,510 in rural locations. Those paying for credit are more likely to be in urban areas (49%) compared with rural areas (37%).

Over half (51%) of retired people in rural areas rely mainly on the State Pension – this is their main income compared to 37% in urban areas.

Satisfaction with overall financial circumstances shows that 27% of adults in rural areas are highly satisfied, compared with 20% of adults in urban areas.

Financial experiences

Andrew Bailey, FCA Chief Executive said the 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," Mr Bailey said.

"The FCA has released weighted data tables which provide details of the survey findings, so that local decision-makers and other organisations can use the information to consider what they can do to help support people who may be struggling financially.

He added: "The FCA’s previous Financial Lives report told the financial story for six different age groups to show key themes at each life stage."