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Former FCA Chair Charles Randell CBE joins the Financial Inclusion Commission

The Financial Inclusion Commission is delighted to announce Charles Randell CBE, former Chair of the Financial Conduct Authority and Payment Systems Regulator, as the group’s latest Commissioner. Charles will join the UK’s leading voices on the subject to champion financial inclusion as a political and industry priority.

Following his support for the call for a National Financial Inclusion Strategy in July, Charles has consistently engaged with the Commission in positive discussions about the legislative and regulatory steps needed to tackle financial exclusion across the UK.

Charles brings a wealth of regulatory experience to the Commission’s diverse Commissioner group, and as a highly respected figure in the nation’s financial services sector, will help the Commission to share the ‘Business Case for Financial inclusion’ with the industry.

Commission responds to HM Treasury’s Cash Access Policy Statement

The Financial Inclusion Commission welcomes the HM Treasury’s Cash Access Policy Statement announced on Friday 18 August. This is a positive move to safeguard access to cash and vulnerable cash users. We welcome the three key commitments in the policy statement that:

  1. no one should have to travel more than 1 mile in urban areas or 3 miles in rural areas to access cash
  2. “reasonable provision” should be free to use and does not include fee-charging ATMs or other pay-to-use services
  3. a new access to cash solution should be put in place no later than when a significant closure or change takes place.

However, the Government must go further than simply protecting customers’ access to cash. Greater steps must be taken to enhance access to banking services more broadly, such as protecting face-to-face banking and introducing inclusive digital banking services that meet the needs of all. 

Digital banking platforms must offer product features that mimic the key attributes of cash, which support effective household financial management, including full transparency and control through true Real Time Balances and flexible recurring push payments, such as Request to Pay. 

However, until digital financial services meet the needs of those persistent cash-users who use cash to avoid financial distress, the Government must protect both access to and acceptance of cash for individuals who would be financially disadvantaged without it.

We particularly welcome the statement that the financial services sector should ensure that customers’ access to cash is not affected by a significant closure, such as that of a bank branch, Post Office or ATM. We fully support the introduction of community banking hubs as part of the solution to a changing financial services market, but the current roll out speed is far too slow and does not meet this test. We therefore call on the financial services sector to significantly speed up the roll out of community banking hubs and other solutions for cash withdrawals and deposits. 

Finally, the Commission urge the Government to incorporate their Cash Access Policy within a National Financial Inclusion Strategy that supports the Levelling Up agenda. The Government must urgently address the growing gap in financial wellbeing and resilience in the UK through a strategy, which drives the supply of accessible and inclusive banking, insurance and savings products and services, and addresses the failure of digital financial products to accommodate cash-dependent customers.

Lord Mayor Financial Literacy and Inclusion Summit (April 2023)

The Commission was delighted to have been invited by the Lord Mayor of London to participate in his Financial Literacy and Inclusion Summit on Wednesday 12 April. 

Commissioner John Godfrey delivered a speech to provide the audience with an overview of the business case for financial inclusion before joining our panel, chaired by President of the Commission, Sir Brian Pomeroy. You can find his full speech here.

Our panellists, Commissioner Danielle Treharne, UK Small Business Commissioner Liz Barclay and LINK CEO John Howells, shared their arguments and insights of a wide range of topics including digital inclusion, small businesses, access to cash, FinTech and the gender pensions gap. The panel made the case that financial exclusion is not just an issue for government to tackle, but for industry too. 

The Commission would like to extend its thanks to the Lord Mayor and his team for organising the event, as well as, those in attendance for their brilliant questions.

Commission response to the September 2022 ‘mini budget’

The current cost of living crisis is well documented, with around 2.5 million renters already behind or struggling to pay their rent and 15.3 million people, or 29% of the population, having already had to use credit to pay for essentials.

The Financial Inclusion Commission were extremely disappointed to see that the ‘mini-budget’ announced on 23 September 2022 was not only severely lacking in measures to tackle barriers to financial inclusion, but is in fact likely to contribute to increased financial exclusion in the UK.

The Commission urge the Government to implement measures to address spiralling financial exclusion without delay, including measures such as the uplift of benefits in line with inflation which will help households who most need it now.

Furthermore, there cannot be inclusive growth in the UK unless the Government introduce a ‘must have regard’ to financial inclusion for the FCA to ensure financial services and products are designed inclusively.

Financial Inclusion Commission hosts first Financial Inclusion Virtual Summit

The Financial Inclusion Commission was delighted to host its first Financial Inclusion Virtual Summit on 15th February 2022. Joined by 145 guests across the financial services, government, not-for-profit and academic sectors, the Conference heard from speakers, such as Rt Hon John Glen MP, Lord Holmes of Richmond, and Sir Hector Sants.

In a video address, John Glen MP, Economic Secretary to HM Treasury reiterated his commitment to a financially inclusive United Kingdom, noting “financial inclusion and how we maximise access to financial products” as one of his highest ministerial priorities. The Minister also noted his view that financial inclusion is “integral” to the Government’s Levelling Up agenda. Sir Hector Sants, Chair of the Money and Pensions Service, echoed these comments on the importance of financial inclusion, while highlighting the impact of the COVID-19 pandemic on personal finances and outlining MaPS National Strategy for Financial Well-being. 

Attendees were also able to hear from and question Theodora Hadjimichael, CEO of Responsible Finance and Eric Leenders, Director of Personal Finance at UK Finance on the topic of the UK’s Financial Inclusion Road to Recovery following COVID-19. In the Q&A session, vital topics, such as, connectivity between service providers were raised. 

The Commission wishes to thank all our Conference speakers and guests for their contributions to the Conference and is looking forward to welcoming guests again to its follow-up events over the coming weeks.

The Commission responds to the W&P consultation on Protecting Pension Savers

The Commission has submitted its response to the Work and Pensions Select Committee’s inquiry into ‘Protecting Pension Savers: Saving for Later Life’. The Commission exposes, for the first time, the wide disparities in the financial position different groups of people will find themselves in when they reach retirement. Most people expect the same – positive – outcome from very different inputs. Many will be disappointed. At the crux of the issue: many peoples’ expectations of their post-retirement lifestyle are rising, while their likely outcomes are falling. 

Whilst we believe that the age limits and minimum earnings levels for automatic enrolment should be reduced, as they deprive many low paid employees of an employer’s contribution, we think it unlikely that an increase in total ‘automatic’ contributions, to bring likely outcomes in line with expectations, will be possible in the next 5 years. So, unless something is done to get people more connected, many are ‘sleepwalking’ into a much worse situation than they expect. It’s not just the new generation of people automatically enrolled. Many people who could get higher ‘employer matched’ contributions do not take them up – often giving up the chance to get £3 of value for £1 of contributions.

As part of our constructive and research-based response, the Commission suggested two solutions to this pensions time-bomb facing the UK. First, a major campaign effort is needed to change the nation’s retirement saving attitude, which remains largely as it was in the 20th century. A properly costed and powerful campaign to create a lightbulb ‘moment’ aimed at the 30 million Britons in work, will help those currently sleepwalking into tough financial situations in later life to understand where they stand and what can be done to improve their likely retirement outcomes. Second, a fresh review, similar to that carried out to such effect by the Pensions Commission, is needed to achieve a consensus on the situation. The last comprehensive analysis from the Pensions Commission is quickly reaching 20 years old. A new review is recommended to prevent the nationwide sliding – incomprehensively – into inadequate pension saving.

The Commission welcomes any opportunities to work and collaborate further on the subject with the Committee and other stakeholders.

You can find our full response here.

Financial Inclusion must be integral to FCA work says Financial Inclusion Commission and Fair by Design campaign

The Financial Inclusion Commission and Fair By Design is calling on the Government to introduce a statutory commitment for the FCA to take into account financial inclusion across the board as part of the Future Financial Regulatory Framework Review.

The Commission and Fair By Design believe that everybody should have access to financial products and services that meet their needs over the course of their lifetime. For this to happen the market needs to be able to accommodate the specific needs of people on low incomes and with certain characteristics, such as those with a physical disability or experiencing poor mental health – regularly referred to as consumer vulnerabilities. However, the market has evolved so that those who often have the least resources and are most vulnerable:

  • struggle to afford, or pay extra for, appropriate products and services because they are deemed to be a higher risk/not as desirable to serve;
  • are not able to access products and services that meet their needs because they are deemed to be ‘non-standard’;
  • are excluded altogether.

The Financial Conduct Authority (FCA) has a range of powers and tools that it uses to regulate the market. These include its statutory objectives as well as the Treating Customers Fairly outcomes and its Public Sector Equality Duty. Despite all of this, it still does not have a clear duty or cross-cutting ‘must have regard’ provision to tackle financial inclusion. The new FCA Consumer Duty will not address this issue either.

We want a clearer remit placed on the regulator to ensure it routinely and properly explores financial inclusion issues across its work, allowing greater clarity on the unintended consequences of regulation, the best interventions needed to ensure financial inclusion, as well as who is best placed to act. This will sometimes be the FCA, the Government, or a mixture of institutions working together.

We believe that the Future Financial Regulatory Framework review provides an appropriate vehicle to achieve this and it is currently open for consultation. The FCA has a huge opportunity here to help those who are being let down by the current financial market, but they need the Government to introduce this duty.

Join our campaign by signing our open letter here.

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