Progress towards the shared goal on access to bank accounts
15 October 2009
DWP published the annual report of the Family Resources Survey for 2007/08 in May 2009. The data that supports the annual report has enabled the government to calculate progress towards 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 new data show encouraging progress and suggest that efforts made by the banks to make bank accounts universally accessible is continuing to increase financial inclusion.
Defining the unbanked
The figure for the unbanked has previously included respondents who did not state whether they had an account, as well as those who positively affirmed they did not have an account. The Financial Inclusion Taskforce has reviewed this assumption in the way the unbanked are calculated, and HMT commissioned further analysis to examine the characteristics associated with being unbanked, part of which sought to understand the differences between adults who ‘did not state’ they had an account and those who positively affirmed they had no account.
This analysis (shortly available on the Taskforce’s website) confirmed that the two groups are distinctly different, and in many respects the ‘did not state’ group are opposites of the unbanked.
For instance, likelihood of:
- being unbanked decreased with age, whereas the likelihood of being a ‘did not state’ increased with age;
- being unbanked decreased with household income, whereas the likelihood of being a ‘did not state’ increased with household income.
The findings therefore strongly suggest that the ‘did not state’ group should not be treated as ‘unbanked’.
The table below therefore provides in bold the figures for the unbanked for 2002/03 to present, based on those who positively affirmed they did not have a bank account. These are the figures that are being used by the Taskforce to measure progress towards the shared goal. It also provides the numbers of the unbanked including the ‘did not state’ group, for comparative purposes.
Progress towards the shared goal
|
Year
|
Unbanked households (including ‘did not state’) (000, % of total)
|
Unbanked households -Positively affirmed no account
|
Unbanked adults (including ‘did not state’) (000, % of total)
|
Unbanked adults - Positively affirmed no account
|
|
2007/08
|
1,249 (5%)
|
690 (3%)
|
1, 850 (4%)
|
890 (2%)
|
|
2006/07
|
1,370 (5%)
|
780 (3%)
|
2,090 (5%)
|
1,010 (2%)
|
|
2005/06*
|
1,300 (5%)
|
760 (3%)
|
1,970 (4%)
|
1,000 (2%)
|
|
2002/03
|
1,840 (7%)
|
1,390 (6%)
|
2,830 (6%)
|
2,020 (4%)
|
*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).
Alongside this, the data show:
- An overall increase of 600,000 banked adults alongside the decrease of 120,000 unbanked adults.
- An overall increase of 400,000 banked households alongside the decrease of 90,000 unbanked households.
Another measure of financial exclusion – the number of adults without access to a transactional (current or basic, not savings) bank account changed from 3.0m (1.65m in households that positively affirm no account) in 2006/07 to 2.71m (1.45m in households that positively affirm no account) in 2007-08.
The Government will now await the Financial Inclusion Taskforce’s fourth annual banking report, due later this year. The Taskforce will provide further analysis of the data, an assessment of progress towards the shared goal, and recommendations to ensure continuing progress on financial inclusion.
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