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Financial Inclusion 2013

Financial Inclusion 2013. Karen Rowlingson, Professor of Social Policy, University of Birmingham Stephen McKay, Distinguished Professor in Social Research, University of Lincoln. Monitoring financial inclusion 2013-2017.

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Financial Inclusion 2013

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  1. Financial Inclusion 2013 Karen Rowlingson, Professor of Social Policy, University of Birmingham Stephen McKay, Distinguished Professor in Social Research, University of Lincoln

  2. Monitoring financial inclusion 2013-2017 • Importance of monitoring financial inclusion after the Taskforce (2005-2011) • Drawing on the framework provided in Kempson and Collard (2012) • Three key components • Sufficient, reliable income • Availability of appropriate financial services • Appropriate advice and education

  3. Research methods • Stakeholder engagement • Secondary analysis of key datasets (WAS, FRS, BHPS/US, LFS, BIS data etc) • Ipsos/MORI omnibus module in June 2013 with 967 adults

  4. Youth employment collapsed in 2008/9(Number and rate of 18-24 year olds unemployed)

  5. Out-of-work benefits provide only a portion of a minimum standard of living

  6. Increasing proportion finding it difficult to manage or just about getting by

  7. Those on lowest incomes have most difficulty getting by

  8. Access to bank accounts is improving

  9. Many struggle to meet unanticipated expenses • 7 per cent would not be able to find £200 at short notice • 18 per cent for those in social class DE • 22 per cent would have to borrow or sell something to find it • 32 per cent for 18-24 year olds • 28 per cent for 25-34 year olds

  10. There is great inequality in the amount of savings people have • Just under half the population (45 per cent) have less than £1,500 in savings • One in five have over £20,000 • Those on higher incomes are more likely to be regular savers though 20 per cent of those in the bottom income decile did save regularly in 2010/11

  11. Borrowing • Data on household borrowing is not consistent/up-to-date • The amount of unsecured credit rose by 10.3 per cent from 2006/8 to 2008/10 • Informal lending is most common among younger people • Student debt will increase substantially in the next few years

  12. Problem debt • Also difficulties with data here • The proportion of people who found their unsecured credit commitments ‘a heavy burden’ increased from 16.2 per cent in 2006/8 to 18 per cent in 2008/10 • Almost one in ten households were in ‘structural arrears’ in 2008/9 (up from 7 per cent in 2006) • Evictions from rented properties have increased since 2010 (to 10,000 in 2013)

  13. Summary • Longest and deepest slump in a century • Welfare reform looks set to hit the poorest hardest in next few years • Data already shows people are feeling the effects (but data are a few years old in many cases) • Some progress on banking but still issues here and with high-cost credit

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