Financial Inclusion

Many people, particularly those living on a low income, do not have access to mainstream financial services such as bank accounts and affordable loans or credit. This 'financial exclusion' imposes real additional costs on individuals and families - often those that are least able to afford it. For example, households who operate solely on a cash budget are unable to make savings by paying utility bills by direct debit, and end up paying more for those services than others who pay directly from their bank account. They are also more vulnerable to loss or theft, and often do not have appropriate insurance cover to compensate them, or have savings to fall back in times of urgent need. They are often, therefore, more likely to have little choice but to turn to doorstep lenders in order to access a loan - and often pay extremely high rates of interest (250% and more) as a consequence. All of these factors often lead to people getting further and further into debt, and the availability of free and independent debt advice often falls far short of demand.

The Government has published its Financial Inclusion Action Plan for the period 2008-2011. Within it is contained:

• the Government’s strategic goals and policy framework for financial inclusion;
• the challenges Government and other key stakeholders, including the financial services industry, face in achieving these goals;
• recent progress in understanding appropriate policy responses to these challenges; and
• the detail of the Government's action plan for financial inclusion