In their 2017 paper, Financial Lives, the FCA noted that 50% of adults were considered to be financially vulnerable and 4.1 million people were defined as being in difficulty, because they have already failed to pay domestic bills or meet credit commitments in three or more of the last six months.
In the 2017 paper, ‘Vulnerability: a guide for lending’ (of which our founder Tim Farmer was a co-author) three stages of vulnerability were identified – Potentially Vulnerable, Vulnerable and Highly Vulnerable. It was also recognised that individuals can flow between the stages and their vulnerability may be permanent, sporadic or temporary.
Furthermore, it is understood that vulnerability can be caused by different factors that can be classed as individual, environmental and institutional and can be broadly separated into four areas;
Although Vulnerability and Mental Capacity are not the same, there is often a cross-over and as early as 2015 we at TSF Consultants recognised that our expertise in Mental Capacity provides an extra level of insight when it comes to identifying financial vulnerability and its causation.
Since then, we have been working closely with institutions and individuals to support them to identify financial vulnerability through education and assessment.