House of Lords calls for action on UK financial exclusion
The House of Lords Financial Exclusion Committee is calling for the UK Government, the Financial Conduct Authority (FCA) and banks to give greater priority to tackling financial exclusion.
In its new report, “Tackling financial exclusion: A country that works for everyone?”, the Lords want an end to the “scandal of the poorest being excluded from even basic financial services and forced to rely on expensive and substandard products”.
Baroness Tyler of Enfield, chair of the House of Lords Financial Exclusion Committee, says the UK financial services sector is a “world leader which makes it doubly unacceptable that it is failing those who need it most”.
The committee heard that more than 1.7 million people in the UK do not have a bank account, and that 40% of the working age population had 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 report says the Government should show its commitment by broadening the remit of the FCA to give priority to tackling financial exclusion, and working with the FCA to establish new rules requiring banks to have a duty of care towards their customers. This would strengthen the protection offered to customers and reduce the potential for unfair practices.
The Government should also appoint a Minister for Financial Inclusion and report annually to Parliament on progress made toward addressing financial exclusion.
The report also called for better financial literacy; a look at the relationship between disability, mental health issues and financial exclusion; and expressed concerns at branch cuts.
The full report can be found here.