Protect cash and help more people access affordable credit, next Government urged

The report, which was commissioned by the FIC and conducted by the University of Birmingham’s Centre on Household Assets and Savings Management (CHASM), makes an urgent plea to all major political parties ahead of the general election on 4 July.

Its key recommendation is for the winning party to commit to a government-led 'National Financial Inclusion Strategy', after finding that millions of people across the country are still being denied access to fair financial services.

MoneySavingExpert.com (MSE) founder Martin Lewis has previously argued for financial inclusion to be made a priority. Speaking to the cross-party House of Lords Liaison Committee in 2021, Martin said: "We need far more senior, powerful and invested government in financial inclusion. Because it is the bedrock of employment. It is the bedrock of being a consumer and, frankly, it is the bedrock of being a citizen."

The new report highlights five key priorities 

It's calling for: 

1. Better access to essential financial services. This includes protecting access to physical cash and face-to-face banking for vulnerable groups, such as older people, people living with disabilities and those living in rural areas without reliable internet access. See our bank branch alternatives guide for options if your local branch is closing.

   The Commission also wants to see better banking options for people with poor credit scores who are typically only offered limited, basic bank account services. See our Basic bank accounts guide if you're struggling to find a bank account that will accept you. 

2. Support to build people's financial resilience. This means helping them gain skills through better financial education and information, including on the types of product available and where to go for guidance. MSE and Martin have long campaigned for increased financial education in schools.

   The report also says people must have access to affordable insurance options. Just over one in ten (13% of) people who held insurance in May 2022 cancelled it to save money due to the cost of living crisis, according to data from regulator the Financial Conduct Authority quoted in the report. You can visit our Insurance hub for guide and tools to help you cut costs.

3. Affordable and well-regulated credit to reduce the number of people in unaffordable debt or turning to illegal lenders. The report found people who could most benefit using credit are being excluded from affordable forms of borrowing due to having a poor or no credit score, or being afraid of the impact on their credit score. These people are also relying on Buy Now Pay Later (BNPL) options to help cover costs.

   MSE has long-campaigned for urgent regulation to protect borrowers using BNPL products. See our BNPL guide for more on how it works and what to look out for.

4. Better support for those at risk of financial problems, including people at risk of scams or unaffordable debt. Around 8.1 million adults need debt advice, according to figures in the report provided by the Money and Pensions Service. Yet demand often outweighs supply and support is not always available to those who need it. The report calls for better solutions to be put in place that are affordable and accessible. See our Debt help guide for support if you're struggling.

5. Promoting ways to save, including saving for retirement. The report found that many people felt they were unable to or did not have the income to save due to the pressures of the cost of living crisis. Some also said they were concerned about being auto-enrolled into a workplace pension scheme as they felt they needed the extra income in the short-term.

   See our Savings hub for guides and tools to find the accounts that'll pay most interest.

What do political parties say on the issue?

There was nothing specifically detailed on financial inclusion in either the Conservative or Labour party manifestos released ahead of the 2024 general election – though the FIC says both Labour and the Liberal Democrats have committed to a National Financial Inclusion Strategy, but given no indication of timings.

The Liberal Democrat party manifesto specifically pledges to require regulators to enforce the protection of access to cash, especially in remote areas, support banking hubs, expand access to bank accounts and do more to support vulnerable consumers. It also states that it will examine the relationship between debt and mental health and put into place better signposting for guidance between talking therapies and debt advice.