Policy paper

Summary of the second meeting of the Financial Inclusion Committee: 20 March 2025

Updated 29 April 2025

Attendees

• Emma Reynolds MP, Economic Secretary to the Treasury (Chair) (EST)

• Doug Brown, Aviva

• Professor Martin Coppack, University of Birmingham and Fair by Design

• Hannah Gurga, The ABI (Association of British Insurers)

• Michelle Highman, The Money Charity

• Sophie Macnair, HM Treasury

• Helen Milner OBE, Good Things Foundation

• Dame Clare Moriarty DCB, Citizens Advice

• Oliver Morley CBE, Money and Pensions Service

• John Owen, HM Treasury

• Kate Pender, Fair4All Finance

• Eric Leenders, UK Finance

• Sarah Pritchard, Financial Conduct Authority

• Jasjyot Singh OBE, Lloyds Banking Group

• Helen Undy, Money and Mental Health Policy Institute

• Jonathan Westley, Experian

Welcome

EST shared how her experiences as a constituency MP have shaped her perspective on financial inclusion and how financial inclusion can contribute to inclusive growth.

Problem identification

EST invited the chairs of the sub-committees and HM Treasury officials to outline their analysis of key issues related to the six areas of focus set out in the Committee’s Terms of Reference: savings, insurance, access to credit, problem debt, financial education and capability, and digital inclusion and access to banking services, with consideration of the cross-cutting themes of accessibility, mental health and economic abuse

Jas Singh presented on Digital Inclusion and Access to Banking, and the most significant barriers to change in this area.  There is a growing number of people who welcome the financial empowerment that digital services give them, and there is an opportunity to enable more to benefit. There is a cohort of people for whom digital services are not currently suitable or appropriate.

Kate Pender presented on Access to Credit.  She set out the role that responsible and affordable credit can play in supporting financial resilience, while also emphasising that some people should not and cannot be lent to responsibly and affordably.  She explained how regulatory reforms have led to welcome improvements in lending practices.  Those reforms have contributed to a decline in the size of the high-cost credit sector but there has not been a corresponding increase in regulated and responsible alternative credit options for this market.  Community finance providers provide vital access to small sums of credit but do not have the scale to meet demand on their own.  Other lenders (and their funders) are cautious about entering this market: concerned by the risk of reputational damage and the cost of compliance and redress.

Hannah Gurga presented on Access to Insurance.  She explained the sub-committee had focused on working age UK adults who do not have adequate financial resilience to protect against or absorb income shocks due to a combination of low levels of financial literacy, low incomes and a lack of disposable finances. ​For these consumer segments access to and affordability of insurance is a real challenge. The sub-committee had focused on (in priority order) income protection insurance, motor insurance, contents insurance, and travel insurance.  

An HM Treasury official then presented on the other areas of focus, which had been developed by HMT officials with input from a range of relevant stakeholders.

In relation to problem debt officials focused on areas where HM Treasury can have the greatest impact through the Financial Inclusion Strategy, and covered availability of quality debt advice, consumer reticence to seek help, and public sector debt collection practices.  The official talked through the barriers to change, referencing consumer behaviour, awareness and service capacity.

On financial education and capability officials set out that fewer than half of children and young people in the UK are receiving a meaningful financial education, and around a quarter of UK adults lack confidence in managing their money.  The barriers to change in this area include a lack of unified responsibility, funding, and strategy for financial education.

On savings officials distinguished between “emergency savings” and “rainy day savings”.  The latter is categorised as saving 3-6 months of essential spending as a way of coping financially with bigger life events, such as job loss or the start of a long-term health condition.   The former is a smaller pot of money to help a household to replace a broken cooker or repair a car.  The meeting noted the proposed focus on emergency savings and link between savings and other areas of the strategy.

Discussion

EST thanked the sub-committee chairs and Committee members for their work to date.  She divided the following discussion into three parts: fatal flaws, gaps and other reflections; prioritisation; and cross-cutting themes.   

There was broad agreement with the issues presented, and the barriers to change.

Members suggested that HM Treasury officials should draw up a high-level common vision which articulated how all the elements the Committee was discussing come together holistically. 

Members also suggested that they would benefit from a better understanding of how the financial inclusion strategy will integrate with work being undertaken by other parts of Government such as the Digital Inclusion Action Plan; the Child Poverty Taskforce; the National Payments Vision; and the Motor Insurance Taskforce. 

Members discussed what success would look like for the cross-cutting themes.  EST asked that the sub-committees set out the relationship between their areas of focus and the cross-cutting themes.

EST was keen that this work does not become silo-ed and the Committee continue to look at problems and interventions through the perspective of those who are financially excluded.  EST looked forward to the lived experience session planned for Committee members next month. 

Conclusion

It was hoped that members could discuss potential interventions and recommendations drawn up by sub-committees and HM Treasury officials at the next meeting of the Committee.  The Chair closed the discussion and thanked attendees for their time and contributions.