The importance of financial services in all of our lives has, in recent years, risen significantly. This is a consequence of both a growing and more prosperous United Kingdom economy, and an innovative financial services sector, which has developed ever more ways of meeting the needs of its customers. Exclusion from the financial system brings with it, therefore, real and rising costs, often borne by those who can least afford them, which is why promoting financial inclusion has been, and continues to be, a key priority for the Government.
To ensure that as few people as possible have to bear these costs, the Government has taken responsibility for developing a strategic policy response, working with key stakeholders from the financial services industry, the third sector, and elsewhere. The Government’s key goals for financial inclusion are about ensuring that everyone has access to appropriate financial services, enabling them to:
manage their money on a day-to-day basis,effectively, securely and confidently;
plan for the future and cope with financial pressure, by managing their finances to protect against short-term variations in income and expenditure, and to take advantage of longer-term opportunities; and
deal effectively with financial distress,should unexpected events lead to serious financial difficulty.
The Government’s action plan for financial inclusion, Financial inclusion: an action plan for 2008-11, sets out in detail how the Government will use the £130 million Financial Inclusion Fund, announced in the CSR, to achieve its financial inclusion objectives over the next three-year spending period from April 2008 to March 2011.
Financial Inclusion - the way forward
This action plan builds on Financial Inclusion - the way forward, which sets out the policy framework for financial inclusion in 2008-11, including:
- a new Financial Inclusion Fund for 2008-11;
- an extension to the Financial Inclusion Taskforce until March 2011, so that it can continue to monitor and evaluate progress and advise the Government on financial inclusion developments; and
- a ministerial working group chaired by the Economic Secretary to the Treasury, with members from the Department for Work and Pensions, the Department for Business, Enterprise and Regulatory Reform, the Department for Communities and Local Government, the Cabinet Office and the Ministry of Justice to develop an action plan for financial inclusion in 2008-11.
Promoting Financial Inclusion
The Government's first financial inclusion strategy, Promoting financial inclusion, was published in December 2004. This:
- announced the creation of a dedicated Financial Inclusion Fund of £120 million for the 2005-08 spending period;
- announced a goal, shared between Government and the banks, to halve the number of adults living in households without access to a bank account, and to make significant progress within two years – recently announced that 60 per cent of the progress required to achieve the shared goal had been made; and
- established an independent Financial Inclusion Taskforce to advise the Government and monitor progress.
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