At some stage in our lives, most of us will have felt like we’ve been excluded from something in one way or another, and that includes when we’re managing our finances. Let’s take a look at what financial inclusion is, who it applies to and what efforts need to be made for a financially inclusive future.
What’s financial inclusion?
You’ve probably heard terms such as ‘levelling up’ being used by a lot of politicians during the cost of living crisis. In early 2022, the government published its White Paper on ‘Levelling Up the United Kingdom’, setting out plans which it says will promote economic, academic and cultural success in parts of the country that have been lagging behind due to geographic inequality. The government intends to do this by boosting productivity, spreading opportunities, and restoring pride and empowerment in local communities.
At its core, financial inclusion’s about giving people equal access to financial services, no matter who they are. But with 1.2 million adults in Britain currently not even having a bank account, we can see that we’re a way off financial equality as things stand. The reason why you’ve been financially excluded won’t always be as simple as where you happen to live. It can play a factor along with other circumstances, characteristics and values that you hold.
Who’s likely to be financially excluded?
The list of those who may find themselves excluded from a financial product or service is non-exhaustive. Many of us will have had periods in our lives when our finances aren’t in the place we’d like them to be, and may have been declined for products such as credit cards or mortgages. For some of us, this will improve with time and perseverance, but that can be harder if the financial system just isn’t designed for someone in your situation. You may have a particular financial vulnerability depending on a range of factors.
Whether you’ve a disability or neurodiversity
There are four million people with disabilities in the UK living in poverty. This suggests that if you’ve a disability, financial exclusion might start long before you get to the point of trying to access a financial product. It may be that you face a higher cost of living due to any special equipment or adaptations required in your home. With 50% of working age disabled people unemployed, it can be harder to find an employer that’ll adapt to your needs, and shockingly, you’re more likely to be paid less than non-disabled people doing the same jobs.
If you’ve moved to the UK from another country
CEO of Bloom Money; Nina Mohanty says: “What we often find in immigrant communities in the UK is that people prefer to use cash. . . there’s this certain reluctance to trust financial institutions.”
It can be difficult to get to grips with a financial culture that may be completely different to the one you were brought up with. Before you even start looking at the numbers, you could find yourself financially excluded simply because English isn’t your first language. Then, of course, there’s also the language of currency. If you’re not used to pounds and pence, it could take some time to understand how its value compares to the currency that you’ve previously dealt with. It may also be harder for you to gain access to financial services if you’ve previously had no economic ties to the UK and therefore don’t have a credit history.
Your religion
Dealing with financial products can be challenging if they work in a way that doesn’t align with the values of your religion. For example, if you’re Muslim, you may find it difficult to find an investment product that’s Shariah compliant as there are fewer available that adhere to these rules.
Your gender
It’s been well publicised that there’s a g