Consumers and Credit Risk - UK - February 2017

Consumers and Credit Risk - UK - February 2017

  • Mintel
  • March 2017
  • Banking
  • 0 pages

Report Description

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The changing demographic profile of the UK highlights the growing need for more non-mainstream lending products. However, despite positive signs of engagement, there is a disconnect between how confident people feel about being able to access credit, and the likelihood that they are trying to improve their credit score.

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Table of Content

OVERVIEW
What you need to know
Definitions

EXECUTIVE SUMMARY
The market
Unsecured lending continues to grow
Figure 1: Gross unsecured lending, 2012-16
Insolvencies rise for the first time…
Figure 2: Individual insolvencies in England and Wales, by type, 2011-16 (not seasonally adjusted)
Brexit will put a dampener on positive employment conditions
The Open Banking Standard will help to address financial exclusion
Use of alternative data will reduce financial exclusion
The consumer
Over half of the population could face difficulty accessing the credit they want
Figure 3: Factors affecting access to credit, October 2016
Two thirds of UK adults owe money on a loan or credit product
Figure 4: Loan and credit product ownership, October 2016
Majority are confident about accessing credit
Figure 5: Confidence in being accepted for credit or a loan, October 2016
Most credit users have their borrowing under control
Figure 6: Amount owed on all loan and credit products, October 2016
Credit use concerns mean people try to repay as quickly as possible
Figure 7: Attitudes towards borrowing, October 2016
Majority never check their credit score
Figure 8: Credit score checking behaviour, October 2016
Over a third are currently trying to improve their score
Figure 9: Attitudes towards credit scores, October 2016
What we think

ISSUES AND INSIGHTS
Different factors affect people’s level of access to credit
The facts
The implications
Changing employment landscape creates opportunities
The facts
The implications
Life events spark engagement with credit scores
The facts
The implications

THE MARKET – WHAT YOU NEED TO KNOW
Unsecured lending continues to grow
Insolvencies remain low
FCA reviews entire high-cost credit market
The Open Banking Standard will help to address financial exclusion

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