Financial Exclusion
Financial Exclusion has been described as inability to access and use appropriate financial products and services. Many people, on first introduction to the idea, think of credit exclusion, inability to access affordable lending. In fact it goes deeper than this to the inability to access and use even a simple bank account. It's estimated that between 6-8% of the UK population are experiencing this level of financial exclusion. Although figures have been declining since 2002, the decline has stalled and it's feared that as the recession hits harder numbers will start to rise again.
Risk factors in financial exclusion include lack of appropriate ID, homelessness, past bad credit, experience of domestic violence, low literacy, English as an additional language and past negative experience of financial institutions.
The effects of financial exclusion are wide-ranging and expensive. Save The Children and Family Action (formerly the Family Welfare Association) produced this report which estimates the poverty premium at £1280 or more a year. Most of the additional costs they mention are a direct result of not having a transactional bank account.
I can train your staff to identify and support people experiencing financial exclusion to open accounts, where possible and desirable, and otherwise to reduce costs. You will be given clear guidance on the difference between this kind of support and giving financial advice. This is because financial advice must only be given by people authorised and regulated by the Financial Services Authority. Well-meaning staff at organisations occasionally cross this boundary and leave themselves and the organisations open to legal action, particularly if the service user is unhappy with the advice at a later date. I teach the Informed Choice model of giving financial guidance which minimises this risk while empowering service users and improving their financial capability.