Financial Inclusion Commission writes to the Chancellor ahead of the Spring Budget to call for a national financial inclusion strategy

The FIC has written to Chancellor of the Exchequer The Rt Hon Jeremy Hunt MP in order to call for a Spring Budget which supports a national financial inclusion strategy.

The letter outlined the extent of concern for financial inclusion in the UK and as such the letter stressed the importance of improving access to financial services and products, as well as the necessity to improve financial inclusion as a means to catalyse growth. The letter urged the Chancellor to implement the following measures:

• The introduction of a national financial inclusion and household resilience strategy led by Government; 
• The increase of access to debt advice and clarification of the regulatory boundary between advice and guidance which makes many debt advice charities anxious about overstepping this boundary; 
• Reform of the Money and Pensions Service to provide proactive rather than reactive advice and enable people to make future financial provisions; 
• Consideration of the impact of the 99% mortgage which may alleviate housing stock issues in the short term but expose people struggling with payments to what will likely be an extremely high interest rate environment over the next thirty years; 
• Consideration of the implications of the proposal on increased cost of buildings, contents, and motor insurance. Reducing insurance premium taxes would offer crucial respite to lower income groups who are disproportionately affected by the increased cost;  
• Bringing ‘Buy Now Pay Later’ into regulation as soon as possible. Research indicates that 1 in 5 people are already in debt arrears when they first use BNPL; 
• Changing the fee rules for Insolvency Practitioners to remove their incentives to mis-sell individual Voluntary Arrangements and reduce the high fees required for some personal insolvency processes, which act as significant barriers to their use;  
• Creating a better support ecosystem for fintechs focused on financially underserved and excluded consumers, including policies to help close the funding gap for social purpose start-ups. Introduce a regulatory sandbox or accelerator programme. All with the purpose of helping these companies navigate regulatory requirements as well as start and scale successfully; 
• Supporting a national network of shared banking hubs to protect cash and other key financial and physical banking services. Go further and incorporate money support agencies, including debt advice, to create community support hubs, broadening the scope of support. 

The full letter can be found here.