Personally and on behalf of my Financial Inclusion Commission (FIC) colleagues, I welcome the opportunity to share our financial inclusion, vulnerability, and resilience thinking with financial services colleagues working in the building society and financial mutual sector. All the more so as our new Government in its January 2024 “ Plan for Financial Services” committed to tackling financial exclusion. Equally importantly, addressing financial inclusion and resilience needs are the very reasons why the UK’s mutual building and friendly societies were established and continue to play a key role in improving the financial wellbeing of the nation.

Together with my fellow commissioners, I welcome the Government’s commitment to double the size of the mutual sector and establishment of both the Mutual and Co-operative Council and the Treasury Minister led Financial Inclusion Committee.

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 and your members 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. 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 our UK financial inclusion gap would unlock inclusive economic growth, improve resilience and prevent financial distress. With circa 23% and increasing of GP time spent dealing with health issues caused/compounded by a financial issue, it would also reduce costs to our NHS and social services. But with our research  informing us that 22% of UK adults are increasing borrowing due to cost-of-living challenges, 18% have no savings, 15% require debt advice, and 5% lack a current account, this 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. 

In our view, a national financial inclusion strategy should prioritise –

• Improved access to essential and affordable financial services, in addition to inclusive digital services including bank accounts, cash and face to face banking services for those who need them.
• Building resilience to income and expenditure shocks with households saving for a rainy day and having access to pension sidecar workplace saving schemes together with appropriate insurance covers with this requiring social tariff solutions to address the UK’s growing ‘poverty premium‘; an issue that is resulting in poorer households most in need of cover having to pay significantly more for it.
• Affordable and well-regulated credit provision, reducing the number of people in unaffordable debt or turning to illegal money lenders.
• A rethink of the advice guidance boundary and scope to enable the provision of accessible, trusted “help” and “support”, particularly in branch and banking hub settings. In addition, smart data and secure data sharing together with appropriate signposting to support consumers who are vulnerable, at risk of scams, and/or face barriers to accessing products and services.
• Supporting vulnerable customers and those facing cost of living challenges access the financial help, information, tools, welfare benefits, grants and social tariff schemes that they are entitled too.
• And in our ageing UK that increasingly needs to work and care, promotion of long term savings to meet retirement and later life care needs.

To find out more about the Financial Inclusion Commission, please see www.financialinclusioncommission.org.uk  and follow us on LinkedIn and X. 

*Please note that the consumer need stats quoted are sourced from Financial Inclusion Commission field esearch undertaken around the UK in the spring of 2024.

This article was first published in Society Matters magazine in September 2024.