Wales’s low income households at crisis point and excluded from mainstream financial services


Financial Inclusion Commission calls for Minister for Financial Inclusion for Welsh Assembly

EMBARGOED UNTIL 12:01am:London, March 11th, 2015: The Financial Inclusion Commission’s (FIC) report highlights the alarming extent of exclusion from financial services amongst millions of mainly low income families.

Financial exclusion: the hard facts:

  • Nearly 2 million adults don’t have a bank account
  • Estimated 2 million took out a high-cost loan due to lack of access to credit
  • 8.8 million are over indebted
  • 13 million don’t have enough savings to tide them over a fall in income
  • Financially excluded pay ‘poverty premium’ of £1,300 each year


The Commission, an independent body made up of senior parliamentarians and independent experts, has heard extensive evidence about financial exclusion across the United Kingdom.

In a report which is likely to figure prominently in political debate leading up to the Election in May, the Commission paints a vision of a financially inclusive society and sets out key recommendations for government, industry and the regulators to deliver before the 2020 General Election.

Key recommendations

1)  National leadership


  • Designate a senior minister with title of Minster for Financial Health in devolved governments and as the government lead on financial inclusion and personal finance with ministerial champions in all departments
  • FCA to promote financial inclusion as a statutory duty and as a core objective


2)    Banking and Payments


  • Competition and Markets Authority to promote transparent pricing as part of retail banking investigation
  • DWP to support Universal Credit with alternatives to Post Office Card Account  and with electronic payment facilities


3)    Credit and Debt


  • Adapt Scotland’s Debt Arrangement Scheme for the whole United Kingdom, with frozen interest rates, reduced fees, more breathing space, reduced time on the credit file and the offer of financial skills training
  • Government to lead effort with retail banks, credit unions and community lenders to fill low income credit gap resulting from restrictions on pay day lending (estimate: £1bn in 2015), without which many will be forced to turn to illegal loan sharks
  • Government to enable the use of public sector data in credit scoring to make financial services access easier
  • Enable community finance institutions to become more sustainable, e.g. raise APR cap on credit unions, lenders / investors understanding business model and risk


4)    Savings and Pensions


  • Introduce a savings auto-enrolment workplace scheme and a feasibility study into savings models
  • DWP to work with industry to develop Swedish-style pensions dashboard to help         understanding real value of consolidated pensions


5)    Insurance


  • FCA to ensure risk profiles, premiums and refusal of covering personal insurance are

based on fair and accurate information

  • Treasury to lead debate on suitable and affordable protection for those unable to obtain

personal insurance


6)    Financial Capability


  • Personal financial skills training from primary school to retirement and at key life stages in between
  • Evaluate  how best to improve financial capability with industry, government, consumer

groups and in conjunction with the Money Advice Service.


Commenting on the report and its aims, Sir Sherard Cowper-Coles, Chair of the Financial Inclusion Commission, said:

“Britain leads the world in financial services but too many are excluded from access to these core services.

Strong leadership from both government and industry is needed now to alleviate this crisis in our country.

Our vision is for everyone to enjoy decent financial health in the United Kingdom. That means every adult is connected to the banking system, has access to affordable credit, is encouraged to save, has the right insurance at the right price, and access to objective financial services advice.”


For further information, please contact:


Matthew Jervois, Kreab: 0207 074 1800

[email protected]