"Being able to open a bank account, build savings for a rainy day, or access affordable loans is vital to helping people across the UK manage their money."
- Tulip Siddiq, Economic Secretary to the Treasury
The new Financial Inclusion Committee is made up of various consumer groups & financial institutions, focused on tackling financial exclusion for those with poor credit histories. The committee will also identify measures to support the 11.5mn adults in the UK with less than £100 in savings to limit their vulnerability to unexpected costs.
Low savings significantly increase vulnerability to unexpected costs or unforeseen life events. Likewise, poor access to the right financial products & services can have a significant impact on financial wellbeing. Expanding credit will offer people more choices and help prevent them from resorting to predatory lenders, such as loan sharks or other exploitative financial practices.
"People with mental health problems can face major barriers when choosing, using, and paying for Financial Services. This can result in many of us paying through the nose for financial products such as insurance, or being effectively locked out of these services altogether.
"It’s fundamentally wrong that a diagnosis of a mental health condition can lead to a life of financial difficulty. That needs to change, so we’re delighted that mental health will be a key consideration in the Financial Inclusion Committee’s work," explained Helen Undy, CEO of the Money & Mental Health Policy Institute.
Jasjyot Singh OBE, CEO OF Consumer Lending at Lloyds Banking Group, added: "We’re strongly committed to financial inclusion. We look forward to collaborating with the government and others on the committee to share insight and discuss how we can help more people to become financially secure."
The committee includes representatives from major financial institutions such as Lloyds Banking Group, Aviva & Experian, as well as Citizens Advice and the Money & Mental Health Policy Institute.
Following today’s meeting, Katharine Moxham, Spokesperson for Group Risk Development (GRiD), said: "Although this is a positive step towards improving financial resilience, we would urge the new Financial Inclusion Committee to look beyond credit & savings […] also consider the vital contribution that protection plays in helping people avoid falling into financial distress due to a loss of earning arising from death, long-term disability, or ill-health.
"Employers are ideally placed to help with this by offering group risk benefits within their package. These help to maintain financial security when the worst happens. Group policies insure 15.3mn employees and paid out a record £2.5bn in claims last year, thus ensuring financial instability wasn’t added to emotional distress," she concluded.
