Consumer Spotlight: FCA Online Tool

FCA consumer segmentation model allows customers to be classified

The Financial Conduct Authority (FCA) has developed an online tool known as Consumer Spotlight. This tool classifies the UK’s consumers into 10 separate groups, which are:

  • Retired with resources – usually homeowners, members of this group are financially savvy, with a high level of savings and little debt. They are usually risk averse when it comes to investment.
  • Retired on a budget – have a low income and are careful about spending any of their limited funds
  • Affluent and ambitious – usually in the 35-60 age group, highly educated and earning high incomes. They are confident about making financial decisions
  • Mature and savvy – have above average levels of income and savings, and have a good knowledge of financial matters
  • Living for now – earning a low income. Not confident with financial matters, but prepared to take more risks than the average person. They are also computer literate and make regular use of the internet
  • Striving and supporting – on a low income and struggling to meet regular outgoings. The majority of this group have dependent children. Generally risk averse
  • Starting out – highly educated, but with a below average income. Comfortable with technology. Almost all members of this group are under 45, single with no dependants, and rent their home
  • Hard pressed – earning a low income, struggling to pay bills, not confident financially and may have no savings at all
  • Stretched but resourceful – homeowners who are confident about financial matters but who are busy people and are pressed for time
  • Busy achievers – high earners who have mortgages, savings and their own pension arrangements

The group with the highest number of people is ‘living for now’, which represents 16.1% of those surveyed. The second most populous group is ‘retired with resources’ (13.3%) and the group with the lowest number of people is ‘mature and savvy’ (4.2%).

The reason this model was developed is that the FCA has an operational objective to secure an appropriate degree of protection for consumers, and that in order to do this it needs to understand the risks different types of consumers face.

The model was compiled following extensive research by marketing agency TNS BMRB, who interviewed over 4,000 people. Additional data was also provided by credit reference agency Experian.

The FCA principally uses Consumer Spotlight to determine which types of customers purchase which financial products. However, a more specialised example of the way it uses the tool is to determine which consumer groups are more vulnerable to scams and swindles.

Firms are also welcome to use Consumer Spotlight. It allows firms to discover which characteristics, attitudes and behaviours people in different groups display, which could assist with product design, with deciding who to market products to and with the nature and style of marketing communications.

The dedicated Consumer Spotlight website at www.fca-consumer-spotlight.org.uk allows users to segment the data in multiple ways. Examples of the information that can be gained from the tool include:

  • Of those aged 25 to 44 with household income of between £25,000 and £50,000, the most common categories are stretched but resourceful (22% of people meeting these criteria) and living for now (17%).
  • Men are much more likely to fall into the affluent and ambitious category (63.9% of this group are men), while 70.8% of busy achievers are women
  • 96.2% of the busy achievers group have access to the internet, compared to only 36.6% of the retired on a budget group
  • 31.6% of the living for now group have no personal/occupational pension provision, whereas all those surveyed in the affluent and ambitious and busy achievers groups have made some form of provision
  • Of those behind with loan or credit commitments, 12.2% were in the hard pressed group, and only 0.7% in the stretched but resourceful group

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.