On 4 November we brought together 150 guests from across the financial services, community finance, public and third sectors, and MPs from across the political spectrum, for a reception in Parliament on Tackling Financial Exclusion Together.

There are over 20 million people in financially vulnerable circumstances across the country. That includes people who are in problem debt, people who can’t get insurance, have no savings, or are just struggling to get by.

A national Financial Inclusion Strategy will be a fantastic opportunity to tackle financial exclusion and ensure that everyone has access to essential financial products and services, when they need them.

This issue needs collaborative action to solve, so we were grateful to be joined by speakers from civil society, financial services and from across parliament.

We heard commitments to support the delivery of a bold and ambitious Strategy from:

• Tulip Siddiq MP, Economic Secretary to the Treasury
• Vikki Brownridge, CEO, StepChange Debt Charity  
• Brian Holland, Director – Customer Vulnerability, Controls and Remediation, NatWest
• Daisy Cooper MP, Liberal Democrat Deputy Leader and Treasury Spokesperson
• Rt Hon John Glen MP, Shadow Paymaster General and former Economic Secretary to the Treasury
• Kate Pender, CEO of Fair4All Finance

Since 2019 we have developed a significant evidence base of people’s experience of financial exclusion, through our research and customer segmentation. And in partnership with stakeholders from across civil society and the industry, we have consulted widely to build consensus around a shared Financial Inclusion Plan that we can all work towards.

Informed by this work speaking to customers and stakeholders, our CEO Kate Pender used her speech to set out the big issues that we all need to focus on to change the lives of millions of people.  

1. Everyone should be able to rely on access to responsible, affordable credit when they need it

Millions of people are excluded from access to even very small amounts of credit. And our research shows that over three million people report that they or someone in their household has used an illegal unregulated lender in the last three years.

Everyone should be able to turn to a source of responsible and affordable credit when they really need it. We are continuing to support the growth of the community finance sector, but it’s clear that we won’t fix this issue unless banks and mainstream lenders are willing to play a more significant role in serving people who are currently excluded. This must include direct delivery, subject to the appropriate regulatory or guarantees cover.

With government, industry and community finance working together on this, we believe that by 2030, we can grow the affordable credit market to £3bn annually, so that 6 million people have a safe, responsible option they can rely on.

2. We need to help more people build a savings buffer

There are 14 million people who have less than £100 in savings – with no savings buffer at all that they can rely on for a rainy day.

We should learn from the fantastic success of pensions auto enrolment, and from the wealth of evidence that Nest Insight have developed on the opt-out payroll saving model, and help people to build up savings automatically out of their pay cheque.

Based on the success of their pilots, we estimate that a full-scale auto enrolment payroll savings programme could get 12 million people saving, including 5 million who have never saved before.

3. We need to increase access to insurance, and cut poverty premiums in the market

In too many cases, it’s the people who most need insurance who are going without, or who have to pay the most. Among our segmentation of people in financially vulnerable circumstances, 1 in 4 – that’s 5 million people – do not have any insurance whatsoever.

We welcome the action the Government is already taking on this, through its taskforce on car insurance, as well the FCA’s new market studies into premium finance and the protection market. It’s vital that we understand what is driving the unfair pricing and poverty premiums that many people experience and ensure there are products that work for people in financially vulnerable circumstances.

4. High-quality debt advice should always be available for people who need it

Stigma delays too many people going to debt advice and many struggle to get it when they do. We need to expand the funding base of debt advice and make sure that all insolvency providers are properly regulated.

This could help 2 million more people a year to access free and impartial debt advice by 2030.

5. We need to improve digital inclusion and support young people’s financial capability

There are millions of people of people who still rely on cash and in person banking services. We welcome the work that has been done to protect access to cash and support the recent steps the government has taken to expand the rollout of banking hubs and protect face to face banking.

We also need to look at how we support the next generation to navigate the financial services system by looking at whether financial education can be delivered in primary schools.

Across all these issues we need to look at how we can reduce the poverty premium that people on low incomes face in the financial services sector – cutting the extra costs for credit and insurance and ensuring that people aren’t penalised for the way they pay for essentials. And to coordinate action and ensure lasting change, we believe it is essential that there is some form of public measurement and accountability on the progress made by the financial services sector on financial inclusion.

Collaborating to achieve change

Our vision is that everyone has access to the essential financial products and services they need. It will take collaboration, imagination and commitment to deliver this and make real change for the 20 million people facing financial exclusion.

To find out how your organisation can collaborate to tackle financial exclusion, please do get in touch with our team.