Financial inclusion

A report from the Financial Inclusion Task Force in May 2007 http://www.financialinclusion-taskforce.org.uk/PDFs/banking_issues_fit_gns.pdf proudly reports that the number of adults in un-banked households has fallen to 2m by 2005/6 and that 1.2 million people have been brought into banking since Sept 2002, most of whom are people who have taken up Basic Bank Accounts. The report also shows that half of the users of Basic Bank Accounts don’t use Direct Debits or standing orders.

Using the facilities of a bank account, and this must include keeping money safe in the account and paying bills in ways that attract maximum discounts (e.g. Direct Debit) is a valid indicator that one is financially included. Just having an account, because e.g. your employer insists on paying wages into a bank account, isn’t. A Transformational Government should therefore not be interested in people having accounts, but in the number of people that exhibit financially included behaviours.

The recent press frenzy about excessive bank charges gives ample reason to believe that encouraging those that don’t exhibit financially included behaviours to change is much more likely if accounts are provided by people they trust, e.g. Credit Unions or the Post Office. I’m confident that providing the financial features that people on low incomes actually want, e.g. weekly direct debits and protection from unreasonable charges, from organisations they trust will give real inclusion rather than a questionable illusion.