What the FCA's Consumer Understanding Report means for your firm

By Mike Ellicock, Chief Executive, Plain Numbers

I've become used to reading reports that skirt over the extent to which consumers struggle to understand numbers.

So it was heartening to see the FCA's Consumer understanding: good practice and areas for improvement report explicitly acknowledge both the scale of the problem: almost 18 million adults with poor financial numeracy, and over 10 million adults with low confidence with everyday numeracy.

There was plenty of food for thought - and action - in there.

Here are our key takeaways:

1. Numeracy is getting the attention it deserves

The FCA explicitly flags struggling with numbers as a barrier to consumer understanding — twice. Their Financial Lives Survey found that 34% of adults (17.7 million) have poor or low levels of numeracy. For too long, customer understanding has been treated as a words-only challenge. This review makes clear that numbers matter just as much.

2. Testing isn't optional — and 'no complaints' doesn't count

Testing and outcomes monitoring is one of the FCA's biggest concerns. Several firms continued to rely on sales data or the absence of complaints as evidence of understanding. The FCA is clear this does not provide reliable assurance. Firms need to test before and after changes, document what changed and why, and prioritise improvements based on real evidence — not assumptions.

3. Simple language isn't enough

The FCA points to plain language, clear structure, visual hierarchy, and layered content as markers of effective communication. Good practice means putting the most important information first and layering detail beneath — which aligns closely with the "How We Think" Principle in the Plain Numbers Method.

4. Consumer understanding must be embedded, not bolted on

The best firms embed consumer understanding into their routine operations rather than treating it as a standalone compliance task. A one-off communications rewrite won't cut it. The FCA wants to see this woven into everyday processes, governance, and training — which is why long-term capability building matters more than quick fixes.

5. Don't wait for problems to appear

A notable number of firms operate reactively — including in how they identify consumers with characteristics of vulnerability and those with lower financial capability. This increases the risk of poorer outcomes, particularly for consumers in vulnerable circumstances. The right approach is to account for lower financial capability and vulnerability throughout the customer journey, not after issues emerge.

6. Cosmetic changes won't satisfy the FCA

Some firms made surface-level changes — shorter wording, new icons, colour changes — without improving clarity, sequencing, or the prominence of key information. The FCA continued to find customers missing or misinterpreting core points. Firms need to go deeper.

7. Consumer Duty isn't a done deal

The implementation deadline has passed — but the expectation hasn't. The FCA is clear that firms doing well are simply doing what they were originally instructed to do. Those falling short haven't followed through. If firms think the time to focus on consumer understanding is over, they are badly mistaken.

8. Sometimes simple really is best

The FCA's own summary puts it plainly: sometimes communicating in a simplistic way is most effective. That's a principle we've built our whole approach around.

Want to understand how Plain Numbers can help your firm meet the FCA's expectations on consumer understanding?