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House of Lords highlights ‘unacceptable’ UK financial exclusion

[vc_row][vc_column][vc_column_text]The House of Lords Financial Exclusion Committee is calling on the UK Government, the Financial Conduct Authority (FCA) and banks to give greater priority to tackling financial exclusion. More than 1.7 million people in the UK do not have a bank account, it notes, and 40% of the working age population have less than £100 in savings. Estimates suggest at least 600,000 older people are financially excluded, while 51% of 18 to 24 year olds regularly worry about money.

The Government should broaden the remit of the FCA to give priority to tackling financial exclusion, and work with the regulator to establish new rules requiring banks to have a duty of care towards their customers. It should also appoint a Minister for Financial Inclusion and report annually to Parliament on progress made toward addressing financial exclusion.

A report by the House of Lords Financial Exclusion Committee identifies the accelerating trend for banks to focus on online services at the expense of their branch network as potentially excluding older people and others who lack access to the internet (53% of UK bank branches closed down between 1989 and 2016). The Post Office now has more physical outlets than all the High Street banks combined, and can offer banking services for 99% of current account customers in the UK, although awareness of this service is very low at present. The banks and Government should fund a major publicity campaign to address this, and to help the Post Office provide services to those customers who have lost their local bank branch.

“The UK financial services sector is a world leader which makes it doubly unacceptable that it is failing those who need it most. Too many people still have no bank account or cannot get access to basic or fairly priced financial services. The ‘poverty premium’—where the poor pay more for a range of services from heating their home to accessing credit—contributes to a vicious circle driving people ever deeper into debt and distress,” says Baroness Tyler of Enfield, Chairman of the House of Lords Financial Exclusion Committee.

She adds: “The Government have said they want the system to ‘work for everyone’. So do we. We hope they share our view that the current level of financial exclusion is unacceptable. The victims are often the most vulnerable in society – the elderly, the poor or those living with physical disabilities or mental health issues. Action must be taken to ensure the financial system in this country works for all. The Government and the FCA should introduce a duty of care for bank customers – currently some banks deliver on their social responsibilities, but too many don’t. It is time we required them to do so. Banks should also ensure they are offering, and properly promoting, basic bank accounts to those customers who need them.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]House of Lords Financial Exclusion Committee is calling on the UK Government, the FCA and banks to give greater priority to tackling financial exclusion[/vc_column_text][/vc_column][/vc_row]

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