The report reveals that 7.34 million adults, or around 13% of the UK population, are experiencing severe financial stress. This group faces barriers to affordable credit and essential banking services, leaving them vulnerable to hardship.

A closer look at the data shows:

• 3.14 million adults (6%) have at least one negative financial event on their credit profile in the past six years. Most relate to CCJs, with 2.8 million issued during that period. The figures indicate a worsening problem, with CCJ volumes rising by 7% in the past year, and the average judgment value increasing by 18% to £2,088.
• 2.88 million people (5%) are classed as financially excluded because they lack an adequate credit footprint to be credit scored. Of these, 1.1 million have no active bank account and over 567,000 are classed as “thin file”, meaning their data footprint is almost non-existent.
• 2.43 million adults (4%) cannot secure any short-term loan arrangement despite making an average of 36 applications each. Loan denials are on the rise – almost 1 in 3 applicants failed to secure any offer in 2025, compared to 1 in 5 two years ago.

A lack of access to any form of legal lending service may force individuals towards illegal lending routes. Research from Fair4All Finance suggests around 3 million UK adults borrowed from illegal lenders in the past year.

Financial exclusion’s implications stretch well beyond impacting someone’s ability to borrow. Without a bank account or a useful credit history, consumers can struggle to access competitive rates on everyday essentials like mobile tariffs, energy plans and car leasing deals. For many, this creates a cycle of disadvantage that’s hard to break.

Even those with a history of financial stability can encounter difficulties, for example, when their credit histories don’t travel with them if they migrate to the UK from other countries. Without any clear guidance on how the UK credit system works, it can be trial and error for those trying to establish themselves here. The rise in CCJs is another warning sign. With judgments remaining on credit records for six years, they can severely impact future borrowing and financial stability.

The good news? Alternative data can help. Our research indicates that 55% of financially excluded UK individuals can be scored using alternative data and that 80% of them will be rated as low-risk customers. That’s 1.4 million additional people gaining transformative access to affordable financial services, potentially for the first time in their lives.

What if too much data results in more declines? Our analysis shows the opposite trend is true – more positive outcomes for consumers overall. Where alternative data is included, we see significant numbers of consumers transitioning from higher-risk to lower-risk categories and therefore eligible to receive more affordable offers from lenders and creditors.

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