Introduction to the FVI:
A clear picture of financial vulnerability in the UK
The Financial Vulnerability Index is an innovative tool to measure and track financial resilience, nationally and locally, across the UK. Created by Lowell and the Urban Institute, and provided by Opinium, the index brings together unique consumer data and publicly available measures to give a clear picture of financial vulnerability in the UK.
By using this tool, policymakers, local authorities, and other stakeholders can gain valuable insight into the financial health of their constituents and better target resources to improve financial resilience. Users can see Financial Vulnerability Index scores and their components for each quarter since 2017 for any nation, region, or parliamentary constituency.
Key Insights
The three important findings of the latest wave of the Financial Vulnerability Index are:
Slow return to pre-pandemic levels of financial vulnerability
Increases in the cost of living appear to be preventing a quicker return to less severe pre-pandemic levels of financial vulnerability. The Financial Vulnerability Index score for Q4 2022 sits at 40.8.
Levels of default edge up to the peak seen at the beginning of the pandemic
The proportion of adults in default has risen to its joint highest level at 12.6%.
Credit use remains significantly higher than before 2020
Credit use has been on a clear rise since the pandemic and remains relatively high at 52.3%, well above pre-pandemic levels that were usually below 50%.
Data Explorer
Explore the results in detail:
Identify trends and patterns relevant to local areas
The Data Explorer enables you to explore the results of the Financial Vulnerability Index in granular detail, at a regional and constituency level. Users can find their region or constituency and view the data broken down by each indicator.
The tool gives users the ability to visualize the data to help identify trends and patterns relevant to their local area and understand the geographical relationships within the index.
Key Regional Insights
Explore the regional differences:
Take a look at the score across several cities and metropolitan areas
Financial vulnerability varies in how it impacts different cities and regions of the UK. Here we take a look at the score across several cities and metropolitan areas to provide greater context to policymakers responding to the complex demands of larger urban areas.
Financial Vulnerability Index scores have decreased in each region at a fairly consistent rate. The change in each region from Q2 2022 ranges from a decline of 1.8 ppts in the West Midlands to 2.7 ppts in Scotland. As a result, the relative level of financial vulnerability by region has remained consistent.
Methodology:
A summary of the methodology.
The Urban Institute developed the Financial Vulnerability Index methodology with data collected from Lowell’s customer database, the FCA Financial Lives Survey and NOMIS. The index is calculated with the following metrics:
- Consumers who are in default [Lowell]
- Consumers with high-cost loans [Lowell]
- Average credit use [Lowell]
- Consumers claiming social benefits [NOMIS]
- Consumers using alternative financial products [FCA]
- Consumers without emergency savings [FCA]
Lowell’s proprietary data included over 9 million records, with results calculated at a parliamentary level and then used to build a regional and a national picture.
About the FVI
Opinium & Lowell Partnership
Lowell Group is one of Europe’s largest credit management companies with a mission to make credit work better for all. As part of this mission, Lowell is using its proprietary data of 9 million customer accounts to provide free access to insight into the UK’s financial health for policymakers at a national, regional and constituency level.
Lowell and Opinium have formed a partnership to leverage the value of the insight in the FVI to aid policy makers.
