Financial Inclusion

Wednesday 22nd October 2025 Westminster Hall

11:00

[Dr Rupa Huq (in the Chair)]

As this is a 30-minute wonder, there will be no time for a concluding speech from Martin Rhodes. I remind other Members present that they cannot make a speech; they can only intervene, with permission from the Member who has the floor.

[Martin Rhodes (Glasgow North) (Lab)]

I beg to move,

That this House has considered financial inclusion.

It is a pleasure to serve under your chairship, Dr Huq. We need a financial system that removes barriers to accessing affordable financial products and services. Those on lower incomes, older people, those with health issues and people with disabilities all have unique needs that an inclusive financial system should be engineered to support. The Building Societies Association reports that 14 million people have less than £100 in savings. According to Fair4All Finance, there are certainly more than 20 million people in financially vulnerable circumstances in the UK.

[David Burton-Sampson (Southend West and Leigh) (Lab)]

I thank my hon. Friend for securing this important debate. In my constituency of Southend West and Leigh, nearly 30% of people who are financially vulnerable are in the “squeezed and sliding” group—people with mortgages and rent commitments but on a low income and, most importantly, with limited savings. Does he agree that more needs to be done to encourage saving for a rainy day, perhaps including an opt-out payroll savings scheme?

[Martin Rhodes]

I agree that we need to do more to encourage savings, but we also need to encourage the incomes that are required for people to make those savings.

The driving reason for this level of financial exclusion has been attributed to an increase in low or unstable incomes, lack of savings and life events such as loss of work or bereavement.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this important debate. I am a firm advocate of local credit unions that provide access to affordable loans and help with learning how to save. Does he agree that financial inclusion must be available in small villages and towns through sound help and advice? Does he also agree that banks need to come back to the villages and stop the centralisation of services, which isolates people from the guidance they need?

[Martin Rhodes]

I agree that we need to look right across the board at the different ways in which people are excluded from financial services, including people living in smaller villages and towns. I also agree about the importance of credit unions to financial inclusion.

It has been reported that 41,500 people in Glasgow North are in financially vulnerable circumstances. That is 44% of the adult population, which is far higher than the national average of 38%. With financial exclusion increasing, the Government must take steps to mainstream inclusive policies and practices in our financial system, which is why I support the Government’s appointment of the Financial Inclusion Committee and the soon-to-be-published financial inclusion strategy.

[Matt Turmaine (Watford) (Lab)]

I congratulate my hon. Friend on securing this important debate. Does he agree that the publication of the Government’s financial inclusion strategy is welcome, given the urgency of the circumstances that many people face? For example, 37,000 people are affected in my constituency of Watford, and we are higher than the national average in three major metrics of need for this vulnerability.

[Martin Rhodes]

I agree that the financial inclusion strategy is a very welcome step in developing, co-ordinating and implementing interventions to support financial inclusion in the UK.

Subsequent policy decisions stemming from the strategy will have to work for a broad range of groups in society. Many face financial exclusion for different reasons, including older people, disabled people and young people.

[Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)]

I thank my hon. Friend for raising this important subject. In Ayr, Carrick and Cumnock, 30,000 adults—40% of the population—are financially vulnerable. That is higher than the national average, and it is hitting older residents and carers especially hard. There are too many forgotten families struggling to access credit, savings and insurance. The upcoming financial inclusion strategy is a vital chance to make a change. Does my hon. Friend agree that we need to work with the Government to ensure that those communities have the financial safety nets they need to thrive?

[Martin Rhodes]

I agree that we need to make sure that all communities have access to financial services, wherever they are and whoever they are. Everybody needs access to those services. I will welcome hearing from the Minister later about the financial inclusion strategy.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I hope that the hon. Member agrees that the Financial Conduct Authority’s work on access to cash is a useful step in the right direction. Does he also agree that provision should be widened to include face-to-face services, whereby people can see someone across the counter and receive advice?

[Martin Rhodes]

I certainly agree. Later in my speech, I will come on to the issues of access to cash and face-to-face financial services.

All the groups that I have mentioned face barriers, but an area of particular concern that I wish to focus on this morning is financial inclusion for disabled people. Much of my thinking on the issue has been informed by the hard work of the Advisory Group, or TAG, a Scottish charitable incorporated organisation run by and for people with disabilities and abilities. Glasgow TAG’s banking campaign steering committee came together in response to growing frustration among TAG members about how banking is excluding them, both in terms of access and in terms of treatment. They have highlighted to me the very real financial exclusion that they face in everyday life.

A key issue that the group has raised with me is access to cash. Many members rely on cash for daily budgeting. The shift to card-only businesses and the closure of free-to-use ATMs are leaving people unable to spend their own money. Quarriers, one of Scotland’s largest social care charities, reports that 76% of people with learning disabilities rely on support with their finances, and the same proportion use bank cards to withdraw cash. In my constituency, we have seen a 22% decrease in free-to-use ATMs between 2019 and 2025. This has created cash deserts, where communities are left without access to cash machines, and those that remain often charge for withdrawals or are inside premises with closing times. I hope that the Minister will engage with the issue and acknowledge the importance of continued free access to cash for financial inclusion.

The second issue that TAG has raised is discrimination in branches. TAG members have shared experiences of being ignored in favour of support workers, denied access to their own accounts or treated with suspicion. There is a strong feeling among TAG members who have spoken to me that financial institutions are not doing enough to meet their obligations under the Equality Act 2010. Will the Government consider supporting mandatory disability awareness and equality training in banking institutions, to help prevent such incidents?

[Tulip Siddiq (Hampstead and Highgate) (Lab)]

I thank my hon. Friend for bringing to the House this important topic, which is very close to my heart. I have had a lot of representations from disabled constituents in Hampstead and Highgate who are very worried about similar issues to those that he describes. They are also worried about the poverty premium in the insurance market, which I am sure my hon. Friend will touch on. Does he agree that any future inclusion strategy needs to address the poverty premium that exists in the insurance market, especially for our disabled constituents who have urged us to make a difference to their life?

[Martin Rhodes]

Yes, I agree that we need to look right across the whole range of financial services, including insurance, as well as those that we have touched on. Exclusion from one service can often lead to exclusion from another and then another. Failing to get access to one service means that people are less likely to get access to another, and the problem becomes greater.

[Steve Yemm (Mansfield) (Lab)]

Does my hon. Friend agree that it is totally unfair that many people, including many constituents of mine, find themselves excluded from some of the best utility deals because they do not have a bank account, so they are unable to pay by direct debit? Effectively, that cuts them off from some of the best deals that are available across a range of products and services.

[Martin Rhodes]

I agree. Financial exclusion has a cumulative effect: if someone is excluded from one financial service because they do not have access to a bank account, they may well find themselves excluded from others. As my hon. Friend says, they may be unable to pay for utilities or other services by direct debit, which would allow them to get the best deals. That cumulative impact is a very big issue.

The last issue that has been raised with me by TAG members is digital exclusion and branch closures. The transition to online banking is simply not accessible for many TAG members, and the closure of local branches has made it harder to get support in person. With the closure of high street banking, we are seeing the loss of the important face-to-face contact that can support people with learning disabilities with access to financial activities.

I support the Government’s work with industry to roll out at least 350 banking hubs that will provide communities with critical cash and banking services. I would welcome any reflections from the Minister on what the Government are doing to ensure that digitalisation does not leave people behind and to support the role of banking hubs. I acknowledge that for many people digital access increases the ability to get services, but for others it does not. That shows the need for a range of ways to access financial services, so everybody can access them.

[Adrian Ramsay (Waveney Valley) (Green)]

I thank the hon. Member for securing the debate and for highlighting the importance of addressing branch closures. In the market town of Halesworth in my constituency, the post office closed its doors for the final time last Saturday—I have been pressing the Post Office for a replacement facility as soon as possible—while Barclays, which is the only bank provider in the town, will cease its weekly facility at the library in the coming weeks. This reinforces his point about the importance of banking hubs as a potential solution for in-person support. Will he reiterate the importance of the Government speeding up the roll-out of banking hubs, particularly for rural communities?

[Martin Rhodes]

I agree that there is a need for face-to-face services. Many people rely on that face-to-face support, so access to banking services through banking hubs is important. I welcome the Government’s roll-out of the hubs, and I look forward to what the Minister has to say about how the scheme will be developed.

Beyond the issues that TAG raised with me, there are many other disabled groups with particular needs, such as blind and partially sighted people. The Royal National Institute of Blind People has reported that only two in five blind and partially sighted people manage their finances independently, and over half of those who do not do so say that it is because of their sight loss. The common reasons that they cite are a lack of confidence and facilities no longer being available. Other experiences of financial exclusion that they report include information not being in an accessible format, a lack of trained bank branch staff and a lack of digital literacy for the transition to digital banking. That is just one example that shows how a truly inclusive financial system will have to be tailored and adaptable to the needs of a diverse range of people.

These are reasons why the financial inclusion strategy must be informed and shaped by the experience of people with disabilities and abilities. The Government must facilitate a proper dialogue between banks and disability groups. Disability-sensitive staff training is needed. Access to cash needs to be protected, including with more free ATMs and inclusive banking hubs. More broadly, the Government must tackle barriers to individuals’ and households’ ability to access affordable and appropriate financial products and services.

[Will Stone (Swindon North) (Lab)]

My partner, who is a financial adviser, often tells me that people come to her far too late in life, when they are in trouble. Does my hon. Friend agree that we need to be more inclusive with education on finances, to gear up the next generation to support themselves, set up pensions and so on?

[Martin Rhodes]

I certainly acknowledge the need for financial education from an early age, so that people understand the system. One of the areas of exclusion is the fact that people just do not understand what financial services and products are. We need to ensure that people understand their options and can explore them.

Even if we addressed all the issues with financial inclusion that we have raised in this debate, there would remain fundamental issues of poverty and inequality in our economic system. The pervasiveness of loan sharks, the lack of access to affordable credit and the heightened cost of living crisis, which have eaten into many people’s savings, all contribute to an exclusionary financial system. I look forward to the publication of the financial inclusion strategy, but also to the publication of the child poverty strategy, alongside action to reduce poverty, promote equitable growth and increase opportunities for all. If we get all of that right, we can build an inclusive financial system for all. I know that the Minister takes these issues seriously; I look forward to her response.

11:16

[The Economic Secretary to the Treasury (Lucy Rigby)]

It is a pleasure to serve under your chairmanship, Dr Huq. I thank my hon. Friend the Member for Glasgow North (Martin Rhodes) for securing this important debate and for giving me the opportunity to discuss a topic that is integral to the ability of his constituents, my constituents and all our constituents to participate not just in our economy, but in society as a whole. I also thank other hon. Members who have contributed to the debate. From the number of interventions that have been made, it is clear that this is a very important issue to all of us throughout the House.

I think we can agree on the importance of ensuring that everyone across the UK has access to appropriate and affordable financial products and services. I really do appreciate the strength of feeling on the issue. I know that some Members present will have had the opportunity at recent party conferences, as I did, to engage with the likes of Fair4All Finance, the Centre for Social Justice, Rooted Finance and other organisations.

I pay tribute to TAG, the charitable organisation in my hon. Friend’s constituency that he mentioned, for the incredible work that it is doing to promote social inclusion for disabled people. I recognise the importance of that work and the need to go further to ensure that our financial system works for everyone; I will return to that point.

As my hon. Friend has set out, some of the statistics on financial inclusion in the UK are sobering: 900,000 people still do not have access to a bank account, 10% of adults have no savings, and another 21% of adults have less than £1,000 to draw on in the event of an emergency. When it comes to digital inclusion, which he raised, 3.3 million people—7% of current account holders—do not bank online or use a mobile banking app. However, I believe that this Government are on the cusp of making a real difference in that regard via the publication of our national financial inclusion strategy. Through that strategy, we can open up access to the right financial services, build households’ financial resilience and transform our constituents’ financial wellbeing.

However, I must stress that although the Treasury will publish the financial inclusion strategy, Government alone cannot solve some of the issues that we have been discussing today. We need a joint effort across industry, regulators and the third sector. That is exactly why I, along with my immediate predecessor—my right hon. Friend the Member for Wycombe (Emma Reynolds)—and my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), have developed our financial inclusion strategy, with the support of a committee made up of consumer and industry representatives.

The committee has been considering a range of barriers faced by those who are financially excluded, as well as three important, cross-cutting themes—economic abuse, mental health and accessibility. The latter theme is particularly relevant to the points that my hon. Friend the Member for Glasgow North has raised. He will appreciate that I am slightly limited in what I can say before the publication of the strategy, but I can confirm that the fact that accessibility is a cross-cutting theme has been important to the development of the strategy. It has prompted the committee to look closely at the role that inclusive design can play in improving accessibility for underserved groups. I also want to make it very clear that we will publish the strategy before the end of the year.

[Peter Swallow (Bracknell) (Lab)]

A key part of financial inclusion is supporting young people to be included and ensuring that they have essential skills, including financial literacy. Has the Minister spoken with any colleagues in the Department for Education about how we can make sure that young people have the right essential skills, including financial literacy, as part of the strategy?

[Lucy Rigby]

I am happy to confirm to my hon. Friend that we have had those discussions. I hope he will see the evidence of those discussions when the strategy is published, and I hope he will see them in a positive light.

I will now address the Government’s position on banking hub services and branch closures, in response to some of the points that have been raised today. I will then come on to some of the other points that have been raised, particularly discrimination in branches, which we must deal with, and digital exclusion.

As one would expect, the Financial Inclusion Committee and its sub-committees’ discussions reflect the fact that banking services have changed remarkably in recent years. Many people, including our vulnerable constituents, have benefited from digital innovations that have enabled them to bank more conveniently and securely at any time and from anywhere. Last year, the vast majority of current account holders—93%—used online or mobile banking services. That includes 75% of over-75s. At the same time, reliance on physical branches has declined significantly. However, the Government are clear about the importance of face-to-face banking to individuals and communities, and are committed to championing access for all. That is why we are working closely with the banks to roll out 350 banking hubs by the end of this Parliament. More than 180 have already opened across the country, offering vital access to cash and everyday banking services.

We have also worked closely with the industry to improve the services that are available at those banking hubs. That includes ensuring that customers do not have to bring their own phone or tablet to access banking support, as well as a commitment to trial the use of printers, enhancing accessibility. We are committed to continuing to work with industry to ensure that banking services in hubs deliver the support that customers require.

I receive regular correspondence about the location of hubs. Hon. Members will know that the location of hubs is set by the Financial Conduct Authority’s rules, which protect access to cash. Although the Government do not have a role in that decision-making process, my predecessor and I have met with Link very regularly. Indeed, I have a meeting with John Howells coming up, and I regularly feed in hon. Members’ views.

Turning to discrimination in branches, I will specifically address the experience of the customers shared by my hon. Friend the Member for Glasgow North. It was, frankly, hard to hear some of those negative and no doubt damaging experiences. I want everyone to feel valued and respected in their interactions with financial services. I know we would all wish that.

As my hon. Friend knows, all service providers, including banks and building societies, are bound by the Equality Act 2010 to make reasonable adjustments where necessary. In addition, under the FCA’s consumer duty, firms must identify where customers or groups are not getting good outcomes, and they must understand why. Although I set out that framework, we would always encourage people to contact their bank to explore reasonable adjustments to the services they might require. It is important that people know that if that is not happening, they have a right to contact the Financial Ombudsman Service.

Earlier this year, the FCA published a report setting out areas for improvement in how financial services firms support customers in vulnerable circumstances, including those with learning disabilities in particular. The FCA highlighted in the report that most firms could not evidence how they had embedded the needs of customers in vulnerable circumstances into their product design, which is something we are determined to see change. As I have mentioned, in developing our strategy we have been looking at the role of inclusive design in developing financial inclusion. There has been really positive work to improve the way that financial services work for disabled people, so it is critical that we build on that.

I want to highlight briefly the work of Project Nemo, which was founded in 2024 to address digital accessibility and the under-representation of disabled people in financial services. Project Nemo’s research demonstrates that inclusive features can support those with learning disabilities to manage their money with greater independence and develop products that are more accessible for all. We are determined to build on the good work that has gone on previously to deal with the issues that my hon. Friend the Member for Glasgow North raises.

I want to address digital inclusion and the points that my hon. Friend raised in that regard. We recognise that digital exclusion can be a significant barrier in how consumers are able to access and use financial services products. That is why digital inclusion is an area of focus in the financial inclusion strategy. It has been specifically considered by its own sub-committee, alongside issues around access to banking services. The strategy, which hon. Members will be able to see in due course, will examine what more industry and Government can do to help address the problems and ensure that everyone can engage with financial services and manage their money in what we all know is an increasingly digital society.

The Department for Science, Innovation and Technology is the lead Department for digital inclusion. Earlier this year, it published a digital inclusion action plan that focuses on digital barriers beyond financial services, including digital skills and confidence—issues raised today—and widening access to devices and connectivity, providing support through local communities.

I have addressed the matter of financial education, but I also want to touch briefly on the point made by my hon. Friend the Member for Hampstead and Highgate about the insurance market. I can confirm to her that insurance is in the scope of the financial inclusion strategy. As she knows, there is other work going on, including via the motor insurance taskforce, which is looking at the issues she raised—specifically, the cost of motor insurance to all our constituents.

[Sam Carling (North West Cambridgeshire) (Lab)]

PwC analysis has shown that one in three adults in the UK struggle to access mainstream credit, largely due to poor or just thin credit files. That is causing a huge financial inclusion problem, especially for young people trying to get a mortgage. Will the Minister meet me to discuss ways we can improve that situation in collaboration with industry, for example through the reporting of rent payments to credit reference agencies?

[Lucy Rigby]

I am more than happy to meet my hon. Friend to discuss those issues. I said at the outset that the financial inclusion strategy is considering cross-cutting themes. The issue of credit rating agencies has come across my desk outside the scope of the strategy, in relation to economic abuse. As he knows, there are serious issues with people—women in particular—having their credit rating affected as one impact of economic abuse. That is something that I am extremely interested in and that we are looking at. Indeed, the committee is looking at it as part of the financial inclusion strategy.

I will close by thanking my hon. Friend the Member for Glasgow North for his continued championing of financial inclusion. I thank hon. Members on both sides of the House for raising their points today. Some raise financial inclusion with me very regularly via correspondence or via conversations in the voting Lobby and elsewhere. I very much appreciate their doing that, and I encourage them to continue to do so as we seek to address these serious issues, which affect not just our constituents’ ability to engage with financial services, but their ability to participate in societal life as a whole. I want to thank again—

Motion lapsed (Standing Order No. 10(6)).

11:30

Sitting suspended.