HM Treasury’s Financial
Inclusion Strategy: a summary
Why is financial inclusion important?
Financial inclusion is about ensuring that everyone has access
to appropriate financial services to
• Manage their money on a day-to-day basis, effectively,
securely and confidently
• Plan for the future and cope with financial pressure protecting against short-term variations in income and
expenditure, taking advantage of longer-term opportunities
• Deal effectively with financial distress, should
unexpected events lead to serious difficulty
Achievements to date
• DTI managing £47.5 million fund for free, face-to-face
money advice (400 advisers in place; 150 more to come 18,000 customers reached)
• Legal Services Commission using £6 million to pilot
methods of money advice outreach (8,000 advised)
• DWP administering £36 million Growth Fund for third
sector lenders, over 15,000 affordable loans
• ‘Now let’s talk money’ campaign launched in January
2007 with £5.4 million funding
• Financial Inclusion Taskforce has a budget of £3 million
for research and enhancing knowledge base
Challenges for effective day-today money management
• Continuing to reduce the number of unbanked
people by promoting basic bank accounts
• Ensuring that newly banked people are using their
bank accounts effectively
• Continuing to focus on the issue of accessibility of
banking services
• Understanding the impact of developments in the
banking market on the Government’s objectives
for effective money management
Key challenges for planning for the future
and coping with pressures
• Increasing the coverage and capacity of third sector lenders so that
excluded people nationwide have access to this source of affordable
credit
• Making saving work for low-income or financially excluded
consumers, through products that meet their saving needs, and through
targeted saving incentives
• Investigating the role of insurance as a product for financially excluded
customers
• Increasing demand for financial services through targeted support,
increased financial capability, and realising the potential of bank
accounts as a route into wider financial inclusion
Challenges for dealing with
financial distress effectively
• Continuing to make progress with the supply of face-toface advice
• Establishing the potential of new, cost-effective,
mechanisms for delivery of advice
• Replicating the success of DTI’s pilots to date in the
nationwide rollout of projects to tackle illegal lending
• Promoting the role of banks and other financial services
providers in supporting people out of financial distress
• Addressing the impact of low financial capability on
people’s capacity to deal with distress
Key announcements
For the next spending period (2008-11) Government will:
• Establish a new Financial Inclusion Fund for new and
ongoing initiatives to promote financial inclusion,
maintaining intensity of action, with the exact amount of the
fund to be determined after the CSR
• Establish a ministerial working group to determine
detailed priorities for financial inclusion policy, and to
publish a detailed action plan after the CSR
• Extend the life-span of the independent Financial
Inclusion Taskforce to evaluate progress and advise the
Government