Financial abuse: Red flags to look for and practical ways you could help

Financial abuse is on the rise. In the UK, it’s becoming increasingly recognised and discussed.

Perpetrators often take control of an individual's money, spending, bank accounts, and borrowing, leaving victims of financial abuse with limited or no access to money. In some cases, perpetrators will also monitor or restrict access to transport or technology – making it hard for their victim to work or earn.

In May 2022, the Financial Conduct Authority (FCA) identified a 15% rise in customers with vulnerabilities. In the main, these were due to low financial resilience and life-changing events caused by the pandemic and the cost of living crisis. They claim that 27.7 million people now have characteristics that could make them financially vulnerable.

Meanwhile, research from Aviva has revealed that “2 in 5 people claim to have suffered economic or financial abuse”: 

• 39% suffered abuse at the hands of their spouse or partner.
• 21% said the perpetrator was a friend.
• 14% said the culprit was their employer.

47% of women are likely to experience this type of abuse at the hands of their partner. However, only 34% are likely to admit to being victims. 

Of those who participated in the survey, 61% of people said their situation had worsened because of the cost of living crisis.

The research highlighted just how widespread economic abuse is in the UK and how, particularly for women, abuse by an intimate partner can last several years. 

10 red flags that could indicate that someone may be a victim of financial abuse

While it isn't always easy to identify if someone close to you is the victim of financial abuse, here are 10 tell-tale signs to watch out for.

1. If someone who is usually pleasant to speak with becomes easily irritated, impatient, or emotional
2. If they are intentionally vague or evasive, refusing to share details or answer questions you may raise
3. They may express concern, doubt, or even a lack of understanding about certain aspects of their wealth, such as protection, online banking, investing, or property matters
4. Deliberate isolation of a person from their family or friends
5. Numerous unpaid bills if someone is supposed to be handling payments on their behalf
6. Signatures on documents that don’t resemble previous signatures
7. The inclusion of additional names on financial accounts
8. Sudden changes in bank account behaviour, such as the withdrawal of large sums
9. Unexplained transfer of assets, including material items, to a family member or someone outside of the family
10. Sudden changes made to a will.

While changes in someone’s behaviour or wishes don’t automatically mean that they are experiencing financial abuse, it may be sensible to speak to your family member or friend. 

Also, be aware that when someone experiences a big life change, including bereavement, job loss, sudden relocation, serious illness, injury or another significant life change – this could make them more vulnerable.

Steps you can take to help reduce the risk of financial abuse 

Help them to keep track of their income and outgoings

Reviewing the income and outgoings of those you believe may be vulnerable to financial abuse could help flag up unusual payments or suspicious activity. 

As well as frequently used current accounts be sure to check and review paperwork for any pensions, investment accounts, property, or insurance.

Maintain regular contact

Schedule regular calls or visits to someone you believe may be at risk. Being in touch regularly should mean you’re more likely to spot signs of financial abuse. 

Introduce them to your financial planner

Introducing your friends and loved ones to a financial planner could be one of the simplest, and most effective, ways of managing financial vulnerabilities.

A financial planner can help by: 

• Creating a financial plan that helps meet their needs and goals in the coming years
• Protecting their wealth against certain risk factors, such as a sudden loss of income, or becoming mentally or physically incapacitated
• Explaining and organising ways to access their cash, investments, pensions, or any other finances that best suit them
• Writing and updating their will
• Managing any additional funding or income they receive, such as a personal health budget
• Giving them more confidence to invest, spend, and save their money responsibly and tax-efficiently.

Next steps if you suspect financial abuse 

If you believe financial abuse is occurring, keep track of all your suspicions and make a note of any evidence that you may have. Report your concerns to the police or your local authority. Charities, including AgeUK, Surviving Economic Abuse, and Hourglass, may be able to offer helpful advice and support.

You may also want to get in touch with trusted professionals that know the individual, such as their GP, solicitor, or financial planner.

Get in touch

If you’re concerned about a friend or family member and would like to speak to us in confidence, please get in touch. 

Email us at enquiries@alexanderpeter.com or give us a call on +44 1689 493455.

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Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.