23 July 2008
Progress towards the shared goal on access to bank accounts
On Tuesday (10th June 2008) DWP published the annual report of the Family Resources Survey for 2006/07. The data that supports the annual report has enabled the government to calculate progress in 2006/07 against the 'shared goal', a key measure of financial inclusion.
The shared goal, agreed between the Government and major UK retail banks in December 2004, has been to halve the number of adults without access to a bank account. The baseline for the shared goal was set by the Family Resources Survey (FRS) data for 2002/03 when 2.8m adults in 1.8m households were found to have no access to a bank account.
The Government was unable to measure progress against the shared goal using FRS data for the two following years (2003/04 and 2004/05) because the data collection did not distinguish between basic bank account and post office card accounts (which do not count as a bank account for purposes of the shared goal). This was corrected in the 2005/06 FRS data, published in March 2007, which showed encouraging progress against the shared goal. The numbers of unbanked adults had fallen to 2m adults in 1.3m households.
The table below compares the data for 2006/07 with previous years' data.
Progress towards the shared goal
|
Year |
Unbanked households (000, % of total) |
Total Households (000) |
Unbanked Adults (000, % of total) |
Total Adults (000) |
|
2006/07 |
1,370 (5.3%) |
25,805 |
2,090 (4.5%) |
46,650 |
|
2005/06 |
1,300 (5.1%) |
25,480 |
1,970 (4.3%) |
46,310 |
|
2002/03 |
1,840 (7.4%) |
25,015 |
2,830 (6.2%) |
45,305 |
The data for 2005/06 and 2006/07 show a rise in the total numbers of both adults and households in the UK of 325,000 and 340,000 respectively. This has led to:
- An overall increase of 220,000 banked adults alongside an increase of 120,000 unbanked adults.
- An overall increase of 255,000 banked households alongside an increase of 70,000 unbanked households.
Another measure of financial exclusion- the number of adults in households without access to a transactional (current or basic, not savings) bank account changed from 2.9m in 2005/06 to 3.0m in 2006/07.
Changes in the numbers of unbanked adults and households between 2005/06 and 2006/07 are within the margin of error for the survey (around 100,000). It would be unwise to draw firm conclusions from the differences shown between the two years, at this stage.
The Financial Inclusion Taskforce will make its third annual banking report to HM Treasury later this year to provide further analysis of the data and recommendations on further actions to improve access to banking.
