NEW CAMPAIGN TO PROMOTE FINANCIAL INCLUSION

‘Now let’s talk money’, the latest initiative to help people on low incomes become more financially secure, has been launched by the Department for Work and Pensions and partner organisations. Many people, particularly those living on low incomes, cannot access mainstream financial products such as bank accounts and low cost loans. This results in real costs on individuals and their families, who are often the most vulnerable people in society. There are also costs for the communities in which they live.

Additional costs for the financially excluded arise because households that operate solely on a cash budget are unable to make savings via direct debits on utility bills and are more vulnerable to loss or theft. They are also far more likely to use the alternative credit market and pay interest many times that of a standard personal loan, often contributing to spiralling debt. In addition, for those who do get into debt or who struggle to make payments, the supply of free face-to-face money advice falls far short of demand.

The strategy to tackle financial exclusion includes a Financial Inclusion Fund and a Financial Inclusion Taskforce to oversee progress on improving access to banking services, affordable credit and free face to face money advice. The Task Force includes representatives from banks, building societies, local authorities, housing associations and the voluntary sector.

The campaign will bring together the complimentary skills of the finance, voluntary and local government sectors to work more closely and invest resources into making a difference. It will support partner organisations such as Citizens Advice who work with financially excluded people.

Teresa Perchard, Director of Policy for Citizens Advice and a member of the Financial Inclusion Taskforce said: “This is a great opportunity to help thousands of people keep out of debt and manage their money. We see the effects of financial exclusion every day – a simple lack of a bank account can lead to higher charges for access to cash and can act as a barrier to employment. Our clients have average debts of 13,000 pounds, whilst the income of most clients is half the national income”.