FIC welcomes new Government's commitment to tackling financial exclusion

The Financial Inclusion Commission welcomes the incoming Government's commitment to implement a National Financial Inclusion Strategy and encourages government ministers to do it as a priority on taking office. 

FIC was set up to improve the nation’s financial wellbeing by championing financial inclusion as a public policy priority. Our vision is for all UK consumers to have access to a current account, affordable credit, appropriate insurance and good quality money advice. We want consumers to be empowered to save for rainy days and retirement; to build resilience against financial shocks; and to receive financial education in school and throughout life.

The new Government's commitment to tackle exclusion was spelt out in Labour's ‘Plan for Financial Services' in January 2024. This highlighted that over 1 million people do not have a bank account and around 14 million have less than £100 in savings. It rightly pointed out that not having access to basic financial services not only decreases the financial resilience of those affected, but also exacerbates the pernicious ‘poverty premiums’ people have to pay to access banking, credit and insurance products that most of us take for granted. 

This is self-defeating and hugely costly to the country. Closing the financial inclusion gap would unlock inclusive economic growth, improve resilience, prevent financial distress and reduce costs to the NHS and social services. But it requires a cross-cutting strategy, led by government, to unlock collaboration across the four nations and between industry, policy makers, charities and the public sector. 

Commented FIC Chairman, Chris Pond:

“The extent of financial exclusion is a source of shame for a country that prides itself on being a global leader in financial services. We cannot go on with a two-track system with a globally successful financial services sector on one hand, but millions of people who cannot access basic products and services on the other”.

In the autumn, FIC will publish new research commissioned from the University of Birmingham’s Centre on Household Assets and Savings Management into the nature and extent of financial exclusion in each of our four nations. This will provide an up-to-date picture of the issues that a National Strategy will need to address. FIC very much looks forward to engaging with the new Government and playing its part in tackling exclusion, so that all UK citizens can contribute to growth and live fulfilled lives. 

Notes to Editors

1. The Financial Inclusion Commission is an independent, financial services-funded body of experts from business and consumer bodies, the charity sector and policy experts, plus parliamentarians from the main political parties across the spectrum. Its vision is for all UK consumers to have access to their own transaction account, affordable credit, appropriate insurance and necessary advice; to be encouraged and empowered to save both for rainy days and for retirement; and to receive financial education in school and throughout life.
2. For interviews with Financial Inclusion Commissioners, including Chair, Chris Pond, Vice Chair, Sian Williams, ex-FCA Chairman, Charles Randell, former Chair of the Treasury’s Financial Inclusion Taskforce, Sir Brian Pomeroy, Director of Public Policy at Mastercard, Pooja Bhachu, former Head of No 10 Policy Unit and interim director of City UK, John Godfrey, or Chief Executive of LINK, John Howells, please contact Sam Chandler or Jonathan Horsman at Centaurus Communications:
   • sc@centauruscommunications.com – 07890 175472
   • jh@centauruscommunications.com -- 07880 786582
3. In the autumn (date TBC, sign up here for updates), FIC will publish two separate reports conducted by the University of Birmingham’s Centre on Household Assets and Savings Management (CHASM):
   • A detailed review of existing academic and ‘grey’ literature and available datasets on the scale and scope of financial exclusion in the UK. It will cover the period since the FIC first report (Financial Inclusion Commission, 2015), with an emphasis on the most recent evidence (published in 2022 and 2023) due to the significant changes in the economy in recent years, including COVID-19 and the cost-of-living crisis.
   • Feedback from people with lived experience of financial exclusion, drawn from nine evidence gathering sessions held in England, Northern Ireland, Scotland, and Wales in April 2024. Four of these were conducted face-to-face; the remaining five brought together stakeholders with a professional interest in financial inclusion in face-to-face, online and hybrid formats. The sessions were jointly organised by FIC and CHASM with the practical support from several partner organisations.
4. FIC published key, early findings from the research in a mini-report for the main political parties’ Treasury leads on 17 June. It sought commitments from the parties to take decisive action to close the financial inclusion gap, starting 5 July. The report emphasised:
   • The Urgent Need for Action: FIC called on all parties to bring forward a government-led National Financial Inclusion Strategy as an urgent priority.
   • New Research: showing that millions are still underserved by financial services, with deleterious 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 (Money and Pensions Service, 2023) 
     • 15% of the UK adult population (8.1 million people) needed debt advice in 2023 and a further 24% (12.6 million people) were in the ‘at risk’ category (MaPS, 2023)
     • In 2021-22, 18% of UK families had no savings at all (Department for Work and Pensions, 2023) 
   • Inclusive Growth Opportunity: A cross-cutting strategy led by government can unlock inclusive economic growth, prevent financial distress and reduce costs to the NHS and social services.