Open Letter From Equifax UK Calls for Industry Collaboration to Tackle Financial Inclusion and Vulnerability

Credit reference agency Equifax UK has called on the lending industry to unite in accelerating financial inclusion and tackling economic abuse, in an open letter to the industry published today.

Drawing on analysis from its brand new 2025 Financial Health Report, Equifax has called for a collaborative effort to address the growing challenges facing UK consumers, including the £20bn unclaimed benefits gap, earlier debt engagement, and the spectre of economic abuse as all in need of critical attention.

Building on the barriers to financial inclusion highlighted in previous Equifax Financial Health Reports, it looks at the UK five years on from the COVID pandemic where £20bn of financial support* has been left on the table by low-income households. Meanwhile, as many as one in five UK women were victims of economic abuse in the last 12 months – a legally recognised form of domestic abuse concerning the control of a partner or ex-partner’s finances that causes financial instability, dependence and consequences long into the future. This requires best practice across credit reporting and debt resolution to ensure survivors are not further penalised.

The letter calls on stakeholders to:

• Embrace initiatives like Policy in Practice’s ‘Apply Once’ and the Economic Abuse Evidence Form (EAEF) to help standardise industry approaches for the better
• Invest in financial education to build awareness of issues like economic abuse and unclaimed support, helping consumers and colleagues on the frontline
• Critically examine current approaches to go beyond existing expectations and help redefine early debt engagement
• Develop and adopt innovative tools and data-driven insights to support financially vulnerable consumers
• Come together, across the industry, to innovate, establish best practice, share knowledge and build a more inclusive financial ecosystem fit for the future

Writing in the letter, Craig Tebbutt, Chief Strategy and Innovation Officer at Equifax UK, said: “Five years on from the global pandemic, we are seeing a complex environment of resilience and vulnerability for UK consumers, one that would benefit from data-informed action. We are committed to working with our partners to create a sector that empowers individuals to live their financial best and there are plenty of reasons for optimism, with so much work already taking place. But accelerating financial inclusion requires a sustained commitment to innovation, collaboration, and an unwavering focus on consumer financial health, and that is a goal that we can only achieve as an industry.”

The call to action comes as Equifax launches its brand new 2025 Financial Health Report, which paints a contrasting picture of the financial health of the nation, with signs of resilience as well as question marks over long-term sustainability and future financial stress.

Key insights include:

• Despite the UK cost-of-living crisis, many consumers are financially managing better than expected, and after rising during 2023, arrears rates are now plateauing.
•  Mortgage origination levels are recovering slowly, but remain 24% below levels observed in 2022.
• Meanwhile 11% of new mortgage lending is at loan terms of more than 35 years as consumers opt to spread out repayments for longer to manage costs, as elevated interest rates continue to impact the mortgage market.
• Repayment behaviours remained relatively stable but total outstanding UK credit card debt climbed to surpass £70bn billion by the end of 2024.
• Previously the pandemic period gave some consumers an opportunity to pay down existing debts, including on credit cards, but that trend has reversed, with overall credit card debt now 4.5% above pre-pandemic levels.

With all these trends compounded by high inflation and persistent cost-of-living pressures, the report goes on to consider the prominence of Buy Now Pay Later, with 36% of consumers using BNPL in 2024, and how UK fiscal policies could further shift the economic landscape.

Paul Heywood, Chief Data and Analytics Officer at Equifax UK, said: “The stability in consumer credit metrics is encouraging, and at face value consumers are managing their finances more effectively than most would expect given the prevailing environment of the last two years. However, it is important to consider if this resilience is widespread, if it is sustainable, and how certain consumers are facing greater difficulties than others. The reality is that many are on the edge – with mortgages and savings determined by a fluctuating interest rate and the option to Buy Now, Pay Later, it can be difficult for consumers to truly understand their exposure.”

Craig Tebbutt adds: “As businesses and consumers continually adapt, changing fiscal policies in the UK will likely shift the economic landscape further as the government seeks to accelerate growth. We believe that data and technology will play a huge role in a more equitable financial future, and we look forward to doing more with our clients to drive innovation and better financial health for the nation.”

For more information and to download the full report, visit: https://solutions.equifax.co.uk/financialhealthreport

To read the full open letter from Equifax visit: https://www.equifax.co.uk/about-equifax/press-releases/-/intlpress/open-letter-to-uk-financial-services-let-s-accelerate-financial-inclusion-across-the-industry