On December 11, 2025, the financial landscapes of both the United Kingdom and South Korea found themselves at pivotal crossroads, as regulators in each country announced sweeping changes aimed at addressing the persistent challenges faced by ordinary savers and low-income borrowers. As the world grapples with economic uncertainty, the moves underscore a global reckoning with how best to guide and protect people navigating increasingly complex financial choices.
In the UK, the City regulator—the Financial Conduct Authority (FCA)—unveiled a set of new rules set to take effect in April 2026. These rules will allow registered banks and other financial firms to provide what’s being called “targeted support” to help people invest their money, according to the BBC. The changes are designed to bridge what’s become known as the “advice gap,” a void where millions are left without affordable, reliable guidance on investments and pensions.
Sarah Pritchard, deputy chief executive of the FCA, described the new regime as “game changing.” She told the BBC, “It means millions of people can get extra help to make better financial decisions. We also hope it will build greater confidence to invest. While investing will not be right for everyone, we know people in the UK invest less compared to the EU or US.”
Why is this shift necessary? According to the FCA’s own survey, nearly one in five people in the UK have turned to family, friends, or even social media influencers for advice on what to do with their money. That’s a staggering figure in an era where financial missteps can have lifelong consequences. The FCA’s data further reveals that only 9% of people received regulated advice on pensions and investments in the twelve months leading up to May 2024. For many, the cost of individualized financial advice—often delivered by authorized professionals for a fee—remains out of reach.
Yet, the stakes are high. About seven million adults in the UK have £10,000 or more sitting in cash savings, which could potentially earn better returns through investing. But with inflation eating away at the value of cash, and with the risks of investing often poorly understood, many feel overwhelmed or unsure of their options. The FCA hopes that targeted support—offered free of charge, according to Pritchard—will give these savers the nudge and the knowledge they need to make more informed choices. “It’s important that consumers understand what it is and what it isn’t, and it’s not detailed advice,” she emphasized. “Commission is banned, [and] we’re expecting most firms that do provide it, subject to our regulation, will be providing it free of charge to consumers.”
But there are caveats. This targeted support won’t be tailored to individual circumstances in the way that a paid adviser would offer. Instead, banks and other firms will provide suggestions based on what similar groups of people might do, given their circumstances and characteristics. The FCA insists that any recommendations must be suitable and only given when they put people in a better position. Vulnerabilities—such as financial hardship or lack of experience—must be identified and considered. And if disputes arise, consumers will still have the right to take their case to the independent financial ombudsman.
The regulator is also keen to prevent abuse. Only firms authorized in advance will be allowed to offer this support, and the FCA has rolled out a new “firm checker” tool to help consumers avoid investment scams. Yvonne Braun, director of policy at the Association of British Insurers, called the FCA’s new rules “a significant step towards closing the advice gap and will empower millions.” Still, some consumer groups warn that strict oversight is needed to ensure this isn’t a backdoor for firms to exploit customers.
Meanwhile, the UK government is making its own moves to encourage more people to invest. The Treasury believes that boosting investment will help drive economic growth, which partly explains Chancellor Rachel Reeves’s controversial decision to cut the annual allowance for cash ISAs from £20,000 to £12,000 for under-65s starting in April 2027. The hope is that more savers will be nudged toward investment products—though critics caution that the change could hit those who rely on cash savings the hardest.
Across the globe in South Korea, the focus is less on investment advice and more on financial support for the most vulnerable. On December 10, 2025, South Korean financial authorities indicated they are considering yet another increase in the contribution rate that banks pay to support low-income finance. The move is part of broader efforts to establish a “Common People’s Financial Stability Fund,” according to Maeil Business Newspaper.
It’s a familiar refrain for South Korea’s banking sector. In March 2025, the contribution rate was already doubled from 0.03% to 0.06% of household loan balances. Now, less than a year later, bills have been proposed to raise it further—to as high as 0.2%—and to require banks to make these payments on a regular basis. The rationale? Losses on low-income financial products have been mounting, and the government wants to ensure the system doesn’t buckle under the strain.
The numbers are sobering. The net subrogation repayment rate—a measure of business losses—on products with special guarantees for the lowest credit borrowers hit 27.4% as of the end of October 2025, up sharply from 14.5% in 2023 and 26.8% in 2024. Sunshine Loan 15, a product specifically designed for those with the lowest credit, saw its loss rate jump from 15.5% in 2022 to 26.2% by October 2025. And Seo Geum-won, the policy agency overseeing these programs, paid back a staggering 2.2357 trillion won in just the first ten months of 2025.
The National Assembly Budget Office recently warned that “monitoring is necessary to prevent the suspension of new loan guarantees or additional financial needs due to the rapid increase in subrogation.” The stakes are high for the banks, who are being asked to shoulder a growing burden to keep these programs afloat. Sunshine Loan Bank, which helps low-income and low-credit individuals move into the formal financial sector, has seen its loss rates climb year after year—reaching 16.9% by the end of October 2025.
South Korean officials argue that increasing the banks’ contributions is the only way to ensure the continued viability of these crucial safety nets. “It is time to consider raising the contribution rate of financial companies to strengthen financial support for ordinary people,” said a representative from the Financial Services Commission. Discussions with banks and other financial companies are ongoing, as the government pushes to finalize the details of the new fund.
Both the UK and South Korea are wrestling with the same core question: how can financial institutions and regulators best support ordinary people in a world where financial pressures are mounting and the stakes for getting it wrong have never been higher? Whether it’s helping savers make smarter investment choices or ensuring that the most vulnerable have access to credit, the answers are far from simple—but the urgency to act is clear on both sides of the globe.
As these reforms roll out, millions will be watching closely to see if these bold new approaches truly deliver on their promise of a fairer, more supportive financial system for all.
