Financial Inclusion Commission (FIC) plea to main political parties: Prioritise National Financial Inclusion Strategy or miss opportunity for growth
FIC is making an urgent plea to each of the main political parties to prioritise the implementation of a National Financial Inclusion Strategy should they win the General Election and form a government on 5 July.
In a letter sent to each of the parties’ Treasury teams, FIC emphasised:
An Urgent Need for Action: The Financial Inclusion Commission (FIC) is calling on all political parties aiming to form the next government to bring forward urgently a government-led National Financial Inclusion Strategy to address the pressing issue of financial exclusion across the UK.
New Research Highlights Exclusion: FIC commissioned up-to-date research from the University of Birmingham’s Centre on Household Assets and Savings Management (CHASM). It reveals millions are still underserved by financial services, impacting their physical and mental wellbeing and economic participation. Select headlines:
More than 9 million adults were declined credit in the 12 months from April 2022 and 4% were turned away by at least three providers (Money and Pensions Service, 2023)
The Money and Pensions Service estimates that in 2023 15% of the UK adult population (8.1 million people) needed debt advice and a further 24%, or 12.6 million people were in the ‘at risk’ category (Das, 2024)
In 2021-22, 18% of UK families had no savings at all (Department for Work and Pensions, 2023)
Inclusive Growth Opportunity: Closing the financial inclusion gap requires a cross-cutting strategy, led by government. Such a strategy can unlock inclusive economic growth, prevent financial distress and reduce costs to the NHS and social services. Moreover, investment in financial inclusion can foster a prosperous financial services ecosystem with opportunities for innovation.
FIC has brought forward key findings from new research it will publish in the Autumn. The work with CHASM will produce a fully up-to-date picture of the extent and nature of financial exclusion in each of the four nations, the most comprehensive since FIC published its inaugural report in 2015.
Read FIC's paper, Fixing Financial Exclusion across the Four Nations, here.
The paper sent to the parties’ Treasury leads draws on feedback from people with direct, lived experience of financial exclusion in communities across the UK. This will be combined with the most recent data on financial exclusion in the full report in the Autumn.
FIC is seeking commitments from the parties to take decisive action to close the financial inclusion gap.Labour and the Liberal Democrats have committed to a National Financial Inclusion Strategy in their manifestos but given no indication of timings.
Publishing the report, FIC Chairman Chris Pond, commented:
“The economic growth that all the parties are calling for can only be achieved if it draws on the skills, energy and ambitions of all citizens, including the millions who are financially excluded.”
“We are sending a message to each of the parties ahead of 4 July: that the incoming government, whatever its colour, needs to close the financial inclusion gap as a priority. If it doesn't it will miss an opportunity to unlock inclusive growth".
"The findings underline the urgent need for a National Financial Inclusion Strategy. That is why we have taken the step of publishing the headlines during the campaign".
The report argues that financial inclusion underpins the financial resilience of UK households. Without access to appropriate products, consumers already in a cost-of-living crisis face paying a ‘Poverty Premium’. Better, fairer products will mean more money in families’ pockets, less reliance on expensive credit and more money spent in local economies.
Said Chris Pond:
“The alternative is more debt, scams, fraud and illegal money lending.This affects not just individuals but their families too, and it costs the NHS and social care services billions. Prevention is better and cheaper than cure, but government needs to take a lead”.
“The parties’ commitment to a National Strategy is tremendous. What we’re highlighting is the urgency. It is a ‘first 100 days’ task, not sometime in the first term or when time allows. The extent of the problem will be clear when we publish our full report in a few months’ time. A lot of the thinking on the contents of a strategy has been done; we now need government to provide leadership.”
FIC’s full report will be launched in the autumn.
