Over half of adults hit by major life events in the last three years, leaving many financially vulnerable
More than half (52%) of adults aged 25-55 have experienced a major life event such as redundancy, serious illness, bereavement or relationship breakdown in the last three years, according to our new research.
Posted October 13, 2026
More than half (52%) of adults aged 25-55 have experienced a major life event such as redundancy, serious illness, bereavement or relationship breakdown in the last three years, according to our new research.
These events often have significant financial consequences, with one in five people who experienced a major life event in the last year saying it led to problems such as falling behind on bills, struggling to manage money or taking on debt. Despite this, just 7% say they feel fully financially prepared if a similar shock were to happen in the next three months.
The findings form part of new research which we had commissioned in partnership with M&G and conducted by the University of Bristol’s Personal Finance Research Centre. The research, based on in-depth analysis of the FCA’s Financial Lives survey plus new polling and interviews with people who recently experienced a life event, examines how life events can affect people's finances, why some individuals are better able to withstand these shocks than others and what can be done to support people to build more resilient personal finances.
The impacts of life events become even more severe when people face multiple setbacks. While 17% of people who experienced one life event reported financial difficulties, this rises to 29% for those experiencing two events and 40% among those hit by three or more in a short period.
Low-incomes and existing vulnerabilities make debt problems more likely
The research shows that the financial impact of life events is not felt equally across society. While anyone can experience redundancy, illness or relationship breakdown, people on lower incomes are more likely both to experience these events and to have fewer resources available to cope with them.
The study found that factors such as existing debt, high housing costs, caring responsibilities, barriers to work, difficulties accessing social security benefits and relying on a single household income can all make it harder to withstand a financial shock.
As a result, what begins as a temporary setback can quickly become a longer-term financial crisis. The report highlights how people can exhaust savings, fall behind on bills and take on debt while trying to weather an initial shock, leaving them increasingly vulnerable if another life event follows before they have had the chance to recover. The wearing down of financial resilience by multiple events is clear, with 41% of people who have experienced three or more life events saying they were ‘not at all prepared’ for another major life event.
Self-employed workers are identified as being particularly exposed, with many lacking access to protections such as sick pay and redundancy pay, meaning a sudden loss of income can have an immediate impact on their finances. For example, only 11% of self-employed workers said sick pay would be a realistic safety net for them.
We are calling on government, employers and creditors to strengthen the financial safety nets available to people facing major life events, through improving protection for self-employed workers, strengthening sick pay and social security support, helping households build savings and expanding access to free debt advice so that people can access help before financial problems spiral into crisis. Specific policy recommendations include:
- The introduction of sickness protection for self-employed workers, as well as review the adequacy of Statutory Sick Pay, which is currently one of the lowest in the OECD.
- Expanded access to incentivised savings schemes such as Help to Save, with eligibility widened to include more low-income households. In addition, employers should offer payroll savings schemes.
- Removal of the five-week wait for Universal Credit and increase in Local Housing Allowance rates
- Expansion of free debt advice services to narrow the gap between demand and supply
- Building on the principles of the FCA’s Consumer Duty to ensure the fair treatment of all individuals who undergo a life event and experience debt or arrears issues as a result.
Steve Vaid, Chief Executive at Money Advice Trust, the charity that runs National Debtline, said:
"Every day, our advisers speak to people whose finances have been turned upside down by events they never saw coming. A serious illness, redundancy, relationship breakdown or taking on caring responsibilities can change someone's circumstances overnight. This research shows these experiences are not exceptional. They are a normal part of life.
If they can, people typically use their savings, cut back spending and seek support from friends and family. But when those safety nets run out, or when a second setback follows the first, many are left exposed to debt and financial hardship.
"Government, employers and the financial services sector need to work together to strengthen the support available when life changes unexpectedly. No one can prevent illness, bereavement or redundancy, but we can do far more to stop those events becoming debt crises."
Jane Rawnsley, Group Head of Corporate Responsibility, M&G plc, said:
“We are pleased to have supported this research, which highlights the challenges many people face when life changes unexpectedly. At M&G, we are committed to helping people build financial confidence by working with expert partners, strengthening support networks and helping build resilient communities.”
Sara Davies, Lead Author and Associate Professor of Household Finance at the University of Bristol said:
“The majority of people in the UK recognise the importance of building financial resilience. While there are things that people can do themselves, such as put some money into savings if they are able to, better structural safety-nets are needed to support people when life events inevitably happen.”
Michael's story
The research echoes the experiences of Michael Crompton, 66, a successful television screenwriter whose financial situation changed dramatically following a combination of life events.
After work began to dry up and his marriage broke down, Michael found himself facing the cost of running two households while also paying substantial legal fees. Despite a successful career, he was eventually forced to seek help from our National Debtline service when he realised he could no longer keep up with his financial commitments.
Michael said:
"I've had a very fortunate and successful career, but work slowed down and at the same time my marriage ended. Suddenly I was paying solicitors' fees, running two homes and dealing with a huge amount of uncertainty.
"I come from a generation where the idea of falling into debt has quite a bit of shame attached to it. But unexpected crises can happen to anyone, regardless of how successful they've been.
"Getting support made all the difference. If sharing my story helps just one person realise there's no shame in asking for help when life takes an unexpected turn, it will have been worth it."
Read the full report, Life Events and Safety Nets, here and a summary of the findings here.
