Financial Inclusion Challenges in UK Leave Many Paying Premium for Basic Services

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The Consequences of Financial Exclusion

A staggering number of individuals in the United Kingdom are struggling to access basic financial services, with far-reaching consequences on their personal and economic well-being. Despite the significance of having a bank account as a gateway to other essential products such as credit, savings, and insurance, millions of Britons are being priced out of these fundamental services.

The Benefits of Current Account Holders

Current account holders are more likely to:

• Embark on entrepreneurial ventures
• Invest in their education or health
• Manage risk
• Weather financial shocks
• Ultimately enhancing the quality of their lives

The Costs of Financial Exclusion

Conversely, those who lack access to financial services are forced to pay exorbitant charges simply to withdraw everyday cash, with prices skyrocketing for a range of products and services including:

• Financial and lending services
• Energy tariffs
• Mobile phone data

The “Poverty Premium”

According to estimates, individuals excluded from these basic financial services are paying an annual “poverty premium” of around £1000. This is on top of the already significant costs they incur as a result of their financial exclusion.

Social Exclusion and Vulnerability

Those who are struggling to access financial services often experience other forms of social exclusion or face vulnerabilities related to:

• Age
• Disability
• Deprivation
• Lack of digital skills