{"id":987,"date":"2023-09-22T08:30:47","date_gmt":"2023-09-22T07:30:47","guid":{"rendered":"https:\/\/www.redstarwealth.co.uk\/blog\/?p=987"},"modified":"2023-03-11T15:40:55","modified_gmt":"2023-03-11T15:40:55","slug":"a-need-for-financial-inclusion","status":"publish","type":"post","link":"https:\/\/www.redstarwealth.co.uk\/blog\/a-need-for-financial-inclusion\/","title":{"rendered":"A Need for Financial Inclusion"},"content":{"rendered":"

According to the Inclusion Foundation<\/a>, around 1.3 million UK adults currently face financial exclusion, with 1 in 4 experiencing it at least once in their life.<\/p>\n

What is Financial Inclusion?<\/h2>\n

Financial inclusion is when individuals have equal access and opportunity to financial products and services that meet their needs, regardless of their own background or income.<\/p>\n

Therefore, working to create financial inclusion is an essential way in which we can work to create equality.<\/p>\n

Financial Education<\/h2>\n

One vital step in creating financial inclusion is through financial education, as individuals need the skills and knowledge necessary to use financial products and services.<\/p>\n

Here is an extract from the Government\u2019s Financial Inclusion Report 2021-22<\/a>:<\/p>\n

\n

\u201cIn addition to building individuals\u2019 skills and confidence, the government is working with partners to make financial communications easier to understand. HM Treasury have been working closely with Plain Numbers, an organisation that seeks to help regulated firms to better support their customers in understanding important communications.\u201d\u00a0<\/em><\/p>\n<\/blockquote>\n

Whilst this is certainly positive progress, it is notable that they don\u2019t actually say how they are building these skills and confidence. Perhaps we should be attempting to teach financial literacy<\/a> at an adequate level throughout the education system so that children grow up to understand these financial products and services.<\/p>\n

\"\"<\/p>\n

However, as stated by the FCA<\/a>, \u201ceducation alone is not enough. Sometimes, markets do not work well to produce good outcomes for consumers.\u201d<\/p>\n

Albeit a very important one, financial education is just one component in creating financial inclusion.<\/p>\n

FCA Research<\/a> on Financial Inclusion<\/h2>\n

As noted by the FCA, we tend to need a current or checking account to be paid and to pay bills, yet by 2020, 1.2 million UK adults still had no current or e-money account.<\/p>\n

They also found that many UK households were struggling to access credit, or struggling to access it at reasonable prices.<\/p>\n

Many of those on lower incomes are unable to access financial advice, which can be an important tool for understanding, and dealing with, things like pensions, savings and investments.<\/p>\n

They also found that 1 in 10 UK adults did not have access to an insurance product and that those in low-income households were less likely to be insured and more likely to face higher premiums if they did have insurance.<\/p>\n

All of these things, combined with their finding that 1 in 5 UK adults have low financial capability, perfectly sum up the issues of financial exclusion.<\/p>\n

Financial Inclusion Helps Economic Growth<\/h2>\n

According to a study conducted by Azimi<\/a>, financial inclusion helps create inclusive growth. He found that whilst financial inclusion had more of a positive impact on economic growth for low-income countries, it still increased the economic growth of middle-income, upper-income, high-income, OECD and non-OECD countries.<\/p>\n

From a social perspective, financial inclusion is vital if we want to work towards achieving equality. However, it also has positive economic effects as it helps to stimulate the economy and trigger growth.<\/p>\n","protected":false},"excerpt":{"rendered":"

According to the Inclusion Foundation, around 1.3 million UK adults currently face financial exclusion, with 1 in 4 experiencing it at least once in their life. What is Financial Inclusion? Financial inclusion is when individuals have equal access and opportunity to financial products and services that meet their needs, regardless of their own background or […]<\/p>\n","protected":false},"author":7,"featured_media":989,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[1],"tags":[595,249,602,68,597,165,41,603,303,594,605,593,599,598,604,596,151,452,601,600],"yoast_head":"\nA Need for Financial Inclusion - Red Star Wealth<\/title>\n<meta name=\"description\" content=\"According to the Inclusion Foundation, 1 in 4 UK adults experience financial exclusion at least once in their lives\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.redstarwealth.co.uk\/blog\/a-need-for-financial-inclusion\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Need for Financial Inclusion - 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