Our recent customer segmentation research found that over 20 million people are living in financially vulnerable circumstances in the UK. That’s 44% of the adult population and an increase of 16% from 17.5 million people in 2022.

The negative impacts of rising financial vulnerability are deep and widespread for millions of people and in our economy. They range from worsening the nation’s overall health and adding further pressure on the NHS to increasing absences from work and reducing productivity. For example, financial vulnerability creates an additional £6.2 billion burden for UK employers, limiting the UK’s growth potential.

Everyone needs access to financial products to navigate daily life, manage their finances, and thrive on their own terms. Financial inclusion is essential for growth and prosperity. We believe there is a significant opportunity for the financial services sector to work together to create a fully inclusive system that works for everyone.

Tackling the drivers of financial exclusion

There are lots of reasons why people experience financial vulnerability, from ill health, low or unstable incomes or a lack of savings to life events like losing a job, bereavement or a relationship breakdown.

One of the main drivers of financial exclusion is insufficient income, as highlighted in our Financial Inclusion Plan. Over 7 million families are going without essentials like food and heating. At the same time, there are over £23bn of benefits and social tariffs that go unclaimed each year.

Helping people maximise their income by ensuring they receive all the benefits they are eligible for can have a substantial impact on a wide range of households – from families struggling with insufficient income to young professionals who may be missing out on Council Tax discounts or homeowners who could claim help with home improvements and sustainability initiatives.

According to Inbest, who help people get the benefits and discounts they’re eligible for, two out of three customers can receive an average of £4,300 more annually.

One of the big ways to help connect people to the support they’re entitled to is for financial services providers to integrate income maximisation tools into their customer journeys, like benefit calculators and grant checkers. This makes it simpler and easier for people to identify what they might be missing out on and boost their income with benefits and discounts.

Lloyds Banking Group’s Benefits Calculator

At Fair4All Finance, we’ve actively supported income maximisation providers in connecting and integrating their products into the community finance sector and mainstream financial institutions.

So we’re delighted to see that Lloyds Banking Group has partnered with Inbest to launch a Benefits Calculator.

The Benefits Calculator is directly available in the Lloyds Bank, Halifax and Bank of Scotland mobile apps. It makes it easy and convenient for customers to find and manage the benefits they are entitled to, alongside other products and services that Lloyds Banking Group offers.

We welcome Lloyds Banking Group becoming the first large financial institution to embed an income maximisation tool in this way and use data to identify customers who may be missing out. And we are eager to see the impact this collaboration will have on bridging the gap of billions in unclaimed benefits and driving financial inclusion in the UK.

‘Billions of pounds of support is provided for those who need it through benefits, but many customers don’t know how to navigate the system or how to make a claim. That’s why we’ve launched Benefit Calculator, helping customers to identify the benefits they may be eligible for, and providing clear guidance on making a claim. Benefit Calculator checks whether customers qualify for a wide range of support, including grants for home improvements and energy efficiency schemes.’

Tamara van den Ban, Customer Propositions Director at Lloyds

‘Financial resilience and unclaimed benefits are major challenges that affect millions of people in the UK. Lloyds Banking Group is one of the few organisations with the reach, scale, and capability to make a meaningful impact on these issues. We loved working with LBG colleagues in such a collaborative environment and are excited to continue working with them to help people maximise their income and build their financial resilience.’

Manu Peleteiro, Co-founder at Inbest

If you’d like to talk with us about our work to support the use of benefit calculators and grant checkers, please drop Ayesha Begum a line at ayesha@fair4allfinance.org.uk.