Financial services 'postcode lottery' exposes rural-urban divide

20 June 2018

A new report from financial watchdog the Financial Conduct Authority (FCA) has exposed significant differences in consumer financial experience between urban and rural areas.

The report has found rural areas much more reliant on local branches for access to banking services, and a higher proportion of over 55s or those with long-term health conditions have a greater difficulty in accessing these services than in urban areas.

People in rural areas are also less likely to use online banking. Take up of online banking in rural areas is barely half that of urban areas (23% vs. 45%).

Despite this, urban dwellers are less likely to be satisfied with their financial circumstances and are more likely to engage in the use of high-cost credit and have more unsecured debt. The FCA recently published a set of proposals for tackling the rampant use of such high-cost products.

A higher number of adults use consumer credit in urban (77%) than in rural (68%) areas, with more adults in urban (27%) than in rural (20%) areas being overdrawn in the past 12 months. More adults in urban (20%) than rural areas (14%) have a credit card and do not pay off the balance every or most months.

Emma-Lou Montgomery, associate director for Fidelity Personal Investing, comments: “From this report, it looks like the notorious ‘postcode lottery’ that affects so many NHS patients is now threatening to extend its reach into people’s financial lives as well.”

The report also found that in rural areas more than half (51%) of retirees are reliant on State Pension income, whereas just 37% in urban areas had it as their main source of income. Nearly one in four (23%) people had experienced some sort of unsolicited approach relating to pensions or investments that could have been a scam.

Worryingly, 38% of non-retirees had no pension provision whatsoever. When it came to savings, more than half (57%) of adults in the UK admitted to having no cash savings or savings of less than £5,000. This rose to 67% in Northern Ireland and 66% in the North East.

Hannah Maundrell, editor in chief of, comments: "There has been an alarming number of bank branch closures recently which is especially bad news for those in rural communities who don’t have the best access to fast speed internet or mobile phone signal.

"If people are not easily able to access their banks, it restricts their ability to budget and manage their money effectively. This could have an impact on their financial situation and leave them more vulnerable to things like fraudulent activity because they’re unable to check their transactions regularly.

"Millions of consumers in the UK are facing financial difficulty due to missed bills - without easy access to sort out these sort of debts, the lack of branches coupled with a lack of decent broadband and mobile signal in rural communities could create a perfect storm and really needs to be investigated."

Tom McPhail, head of policy at Hargreaves Lansdown, adds: “The FCA’s research deepens our knowledge of the UK’s finances. It is clear from this data many people are still unsure of their financial futures and mostly they aren’t turning to regulated financial advice for answers.

“A huge amount of progress has been made in recent years, cutting charges, strengthening customer protection and developing simple, reliable solutions for customers. But people still need guidance and help in planning their future. There is a vital challenge here for pension and investment companies to work with the government’s new financial guidance body to develop and deliver financial guidance that is accessible to all.”

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