Projects
Financial exclusion
People without bank accounts
The poor are being gradually excluded from basic financial services and forced to operate on a cash only basis. 4 million people now have to pay up to 40% more for their gas and electricity because they cannot, or do not feel able to, use bank accounts, and are therefore have to use prepayment meters. These people also now have great difficulty cashing cheques. Two thirds of those without bank accounts rely for credit on check traders, moneylenders and pawnbrokers, whose average rate of interest exceeds 200%.
But government and banks could work together to find solutions. Recommendations in the report include:
- The financial industry should provide simple bank accounts, providing money transmission services but without overdraft facilities.
- The Government and industry should agree a target date for the universal provision of money transmission facilities, so that every adult can use banking services to pay bills and make essential purchases.
- If the industry fails to meet the target, the Government should consider imposing a Universal Service Obligation (effectively the statutory right to a bank account).
- There are real attractions in post offices and banks working together such that people can access their bank accounts from the local post offices.
- The Government should extend the Social Fund to be a source of affordable credit to all low income households.
View/download the executive summary.
View/download the full report.
Also, see the related projects on the future of the Social Fund.
Young people and financial services
There has been little work specifically addressing the financial service needs of young people.
We worked with the YMCA to investigate the adequacy or otherwise of financial services for young people. We investigated the needs and aspirations of young people in YMCA hostels in relation to financial services, through a questionnaire administered to over 1,000 young people. Based on this survey plus focus groups, we then identified the main issues and shortcomings in relation to financial services for young people.