Poorest citizens ‘worn down’ as financial inclusion remains distant dream for the UK. The UK has made little progress in the last decade towards creating a truly financially inclusive society, a new study reveals.
Whilst unemployment is the lowest it has been since the mid-1970s, both real earnings and access to secure work have declined in recent years, with a growing number of people placed on zero hours contracts over the last decade, according to the report.
Unemployed individuals have seen their income from social security fall significantly over the last 10 years. With an individual’s level and security of income a key driver of financial inclusion, those on the lowest incomes are left with no capacity to withstand the current cost-of-living crisis.
Led by the Centre on Household Assets and Savings Management (CHASM) at the University of Birmingham, the report – published today – demonstrates how little progress has been made towards a truly financially inclusive society.
The consequences of these increasing challenges on people’s health and relationships are stark. Latest data from October this year found that more than one in three of the population say that they have experienced financial difficulties over the past year, with 81% of these people saying it has affected their mental and/or physical health, and more than half saying it has affected their relationships.
The report reveals some progress in relation to financial inclusion over the last decade, with fewer people lacking access to bank accounts and more people having access to private pensions. However, the authors – Professor Adele Atkinson, University of Birmingham, Professor Karen Rowlingson, University of York, and Professor Stephen McKay, University of Lincoln – note that those who remain unbanked face problems in an increasingly cashless economy, and that access to private pensions will not contribute to financial security whilst so many people pay little or nothing into their funds.
Friends Provident Foundation and Barrow Cadbury Trust, supporters of the monitor for the last 10 years, commented: “Financial inclusion and reducing vulnerability to financial shocks has never been more relevant to millions of people now facing a cost-of-living crisis. The team at CHASM and academic partners have been analysing the data and the policy for ten years, providing a sound evidence base for policy, regulation and action. Friends Provident Foundation and Barrow Cadbury Trust are proud to have supported this work to maintain a focus on financial inclusion.”
You can download the report using the link on the left.