The history

The term ‘financial inclusion’ first emerged as a named policy in 1997 and much work has already been done on identifying the nature and causes of exclusion. This work forms the foundation on which the Financial Inclusion Commission hopes to build.

Portrait of elderly man and his wife looking at plastic card

Key milestones in the history of financial inclusion debate in the United Kingdom:

  • 1999 - Social Exclusion Unit set up a Policy Action Team to look at financial exclusion.
  • 2003 - Basic Bank Accounts introduced.
  • 2004 - HM Treasury publish ‘Promoting Financial Inclusion’.
  • 2005 - The Financial Inclusion Taskforce was established with membership drawn from industry, the third sector, consumer groups, local government and academia.
  • 2011 - The Financial Inclusion Taskforce was disbanded, as planned.

Progress towards greater financial inclusion has been made - for example there are now more people with access to a bank account than ever before. But there is still a great deal of work to be done. Sir Brian Pomeroy, the Chair of the Financial Inclusion Taskforce, argued that more work needed to be done to understand the behaviour of low-income groups, that there needed to be greater transparency on bank lending, and that debt and money advice had been hit by the recession.

The changing context in the UK is likely to exacerbate financial exclusion and create new barriers:

  • The increasingly digital delivery of financial services offers a gateway to inclusion for some, but may act as a barrier for others, further entrenching exclusion.
  • The squeeze on household budgets has led to increased problem debt, and this is expected to get worse as interest rates begin to rise.
  • A successful roll-out of Universal Credit will also require greater access to financial services and an increased level of financial capability.