Understanding financial inclusion Using action research and a knowledge exchange review to establish what is agreed, and what remains contested

Stephen Sinclair, Fiona McHardy, Louise Dobbie, Kate Lindsay and Morag Gillespie

Foundation

Further information This report and a summary version are available in print and as a pdf from Friends Provident Foundation, Pixham End, Dorking, Surrey, RH4 1QA (foundation.enquiries@ friendsprovident.co.uk and www.friendsprovidentfoundation.org). Published 2009 by Friends Provident Foundation Pixham End Dorking Surrey RH4 1QA © CEN 2009 ISBN 978-1-906249-51-9 (pbk) ISBN 978-1-906249-52-6 (pdf ) All rights reserved. Reproduction of this report by photocopying or electronic means for non-commercial purposes is permitted. Otherwise, no part of this report may be reproduced, adapted, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopying, or otherwise without the prior written permission of Friends Provident Foundation. Friends Provident Foundation Friends Provident Foundation is a grant-making charity working to create the conditions throughout the UK for improved access to appropriate financial services for those who are currently excluded, particularly those on low incomes or otherwise vulnerable to market failure. It particularly wants to encourage thinking that deals with the cause of the problem. Established as part of the demutualisation of Friends Provident Life Office in 2001 and the flotation of Friends Provident plc, it is independent and has its own board of Trustees. www.friendsprovidentfoundation.org Scottish Poverty Information Unit (SPIU) The Scottish Poverty Information Unit (SPIU) is a research centre based in the School of Law and Social Sciences at Glasgow Caledonian University. SPIU was established in 1995 and undertakes applied research and analysis into poverty and social justice issues, with a particular focus on six thematic priorities: measuring poverty; improving public understanding of poverty; poverty and equalities issues; community well being; financial inclusion, and work and welfare policy. Through robust policy analysis, quality research and widespread dissemination of poverty information, SPIU aims to provide information and analysis useful to those committed to eradicating poverty in Scotland. Editorial and design by Magenta Publishing Ltd (www.magentapublishing.com) Printed in the UK by Hobbs the Printers Ltd

Contents

Acknowledgements

5

Executive summary

6

1 Introduction

10

2 Financial exclusion and inclusion in the UK

17

3 Evidence review forums

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4 Knowledge exchange conference and online discussion forum

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5 Conclusions

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Notes

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References

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Appendices I

Evidence review and conference participants

II Evidence and literature searches

60 62

3

Acknowledgements

This project was funded by Friends Provident Foundation. The authors are grateful for the helpful insights and suggestions contributed by the members of the project Advisory Group: Danielle Walker Palmour (Friends Provident Foundation), Ann Millar (Scottish Funding Council), Faith Reynolds (Toynbee Hall), Sharon Collard (Personal Finance Research Centre, Bristol University), Joel Lewis (HM Treasury), Mick McAteer (Financial Inclusion Centre), Andrew Rudge (Royal Bank of Scotland) and Jim McCormick (Joseph Rowntree Foundation). We would also like to thank John McKendrick, SPIU Director, and Brenda Graham, SPIU Administrator, for their support during this project. Finally, our thanks also go to those who contributed to this project by participating in the evidence review forums, attending the knowledge exchange conference at Glasgow Caledonian University, or contributing to the online discussion forum.

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Executive summary

Objectives The aims of this project were to clarify the knowledge base of financial inclusion in the UK, by establishing agreement over what is accepted as genuinely known, what is disputed or remains uncertain, and what the outstanding knowledge gaps are that require further research.

Methods To achieve these outcomes, rapid systematic reviews were undertaken of six aspects of financial inclusion research: access to banking services, to credit, to insurance, savings and assets, money advice and financial literacy and capability. The findings from these reviews were discussed in six evidence review forums by stakeholders from the different sectors involved in financial inclusion. These discussions were re-examined at a deliberative knowledge exchange conference involving a wider range of stakeholders. An online discussion forum was also established to enable stakeholders to comment and exchange opinions on financial inclusion research and policy.

Participants’ views on the research findings There was widespread agreement over many aspects of financial inclusion in the UK, but a number of issues remain contested or uncertain. Banking services The number of households without bank accounts in the UK has fallen in recent years, but access to banking services remains a problem for a significant proportion of lower-income households and those living in deprived areas. Participants agreed that basic bank accounts and the Post Office Card Account are successful in terms of the number of accounts opened, but they offer limited services. Possession of a basic bank account does not in itself constitute a significant degree of financial inclusion. However, there was uncertainty about whether customers encounter barriers in opening basic bank accounts. Some participants also questioned whether an appropriate policy objective is to regard opening a bank account as a first step towards increasing people’s use of a range of financial services.

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e x ecuti v e summar y

Credit Participants agreed that mainstream credit services do not provide the flexibility and budgeting control that low-income households require. However, the costs of providing accessible lending and credit services to low-income borrowers are not easily reduced, and few credit unions and community development finance institutions (CDFIs) have the capacity to satisfy the borrowing requirements of such customers. There was disagreement about whether credit unions and community development finance institutions should charge commercially viable interest rates or fees for services to low-income customers. It was agreed that the Social Fund does not meet the credit needs of low-income households. However, the nature of these reforms was the subject of diverse opinion. Insurance Participants agreed that lower-income households are under-insured in terms of home contents insurance. Insurance with rent schemes have increased the availability of home contents insurance among social renting tenants, but take-up remains low. Savings It was acknowledged that 28 per cent of UK households had no savings or assets in 2005/06, and this proportion is significantly higher among lower-income groups. However, some participants questioned whether it is realistic to encourage saving among low-income households. Money advice Participants agreed that demand for money and debt advice is increasing and is likely to continue to do so for the foreseeable future, perhaps becoming unsustainable in relation to current provision. Financial literacy and capability In 2006 some 10.5 million people in the UK were poorly informed about financial services or had other financial capability problems. There were a number of contested issues relating to financial literacy and capability: Is further regulation of the private financial services required to increase consumer protection or compel provision for currently under-served groups? ■■ Does an emphasis on cultivating financial capability distract from the need for greater consumer protection and market regulation? ■■ Can much more be done to reach the minority of those who remained unengaged with financial services? ■■

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Lessons for the future: Research Participants highlighted a number of good practice lessons relating to research projects. They also discussed how research evidence might better be communicated, and how our understanding of current issues could be improved. Some specific subjects for future research were also identified. Good practice ■■ ■■ ■■

Involve research users earlier in the research process. Evaluate the long-term impact of policies. Evaluate the effectiveness of local initiatives and disseminate information about these more effectively (for instance, the impact of credit unions).

Communicating messages Develop local financial service directories providing an accessible overview of provision and organisations in an area. ■■ Establish a user-friendly repository of research findings and best practice guides. ■■ Improve data on, or sharing of information about, the circumstances of disadvantaged and marginalised groups, i.e. minority ethnic communities; asylum seekers; those with mental health problems; people with learning difficulties; disabled people; older people; victims of domestic violence; and people with convictions. ■■

Enhance understanding Examine the lessons from local coordination of financial inclusion services and partnership working, for example ‘one-stop shops’, community banking partnerships, etc. ■■ Improve understanding of those who remain unengaged with financial services. ■■ Improve understanding of the consequences of financial exclusion and the benefits of inclusion. ■■

Future research Examine key aspects of behavioural psychology in relation to financial exclusion – for example, the influence of expectations on responses to opportunities and services. ■■ Monitor the effect of changing economic conditions on the distribution of and trends in financial exclusion. ■■

Lessons for the future: Policy Participants from the third sector, and those representing excluded groups, advocated using the opportunity provided by the credit crunch and the recent public investment in banks to significantly reform the private financial sector and improve conditions for financially marginalised groups. However, private sector stakeholders disputed the need for and benefits of such measures. Participants agreed that local partnership working should be improved, to develop integrated support to households experiencing financial problems.

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Several felt that public bodies should stipulate in contracts that private financial service providers demonstrate inclusive best practice, and more public bodies should use credit unions and community development finance institutions to supply their financial support services. Some participants supported the idea that social landlords could increase uptake of home contents insurance by assuming tenants opt-in, and automatically allocating a top-up of their rent payments to pay for this. Borrowers should be made more aware of the full costs of doorstep lenders.

Lessons for the future: Knowledge exchange The online forum developed for this project was an interesting experiment, but did not make a significant contribution to the exchange of information. The face-to-face discussions involved in the evidence review forums and project conference were the most popular form of exchanging information. Participants regarded networking opportunities as the most effective way to improve knowledge exchange, followed by email updates, and newsletters. The evidence review précis produced for this project were generally regarded as useful summaries, but few participants have time to read research reports in full. Participants expressed considerable interest in further knowledge exchange opportunities, but many do not have the organisational resources to support participation in this.

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Chapter 1 Introduction SUMMARY Financial exclusion is the inability to access essential financial services in an appropriate form. Such access is widely recognised as essential for social inclusion, and financial exclusion has been the subject of considerable research and policy activity in the UK in recent years. However, not all the evidence about financial exclusion nor the effect of policies to increase inclusion are as well known as they ought to be. This project was designed to address this issue by involving stakeholders from across different sectors in dialogue about the state of knowledge of financial inclusion in the UK. This introductory chapter clarifies the meaning of financial inclusion and describes the steps taken in this project to improve the flow of information about this issue, through a combination of action research methods and knowledge exchange activities.

Introduction The social and political significance of financial inclusion in the UK is widely acknowledged: ‘Exclusion from the financial system brings real and rising costs, often borne by those who can least afford them. Promoting financial inclusion has therefore been, and continues to be, a key priority for the Government’ (HM Treasury 2007a: 3). A considerable body of research has been undertaken and information accumulated about financial in/exclusion in the UK. In this field, as in many other policy areas, the problem is not a lack of evidence: ‘We have warehouses of unused information “rotting” while critical questions are left unanswered and critical problems are left unresolved’ (Al Gore, quoted in Petticrew and Roberts 2006: 79). The challenge is not about undertaking further research, but improving how information is shared, and ensuring more effective use of existing evidence. There is growing interest in making more effective use of research to improve policy and practice in the UK. For example, the British Academy recently noted that: researchers need to recognise what they have to offer public policy, and look to enhance the ways in which their work can be better exploited, including ... networking and outreach to policy-makers. Policy-makers say that they are often unaware of the research expertise that is available, because academic research teams are not effective at promoting what they have to offer. (British Academy 2008: xiii)

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To build upon the cumulative evidence and inform policy and service reform requires improvements in knowledge management and exchange, and more effective interchange between stakeholders. This project was designed to contribute to the flow and use of information about financial inclusion in the UK by involving representatives from different sectors in a review of evidence, and by encouraging dialogue between them about research needs and priorities.

What is financial inclusion? Financial exclusion means a lack of access to and use of necessary financial services. The following definition of financial inclusion is widely used: A state in which all people have access to appropriate, desired financial products and services in order to manage their money effectively. It is achieved by financial literacy and financial capability on the part of the consumer, and access on the part of financial product, services and advice suppliers. (Transact, nd) However, there is no universal agreement over what financial inclusion should entail, and some of the debates and controversies in this area reflect different ideas about what this should mean. Financial exclusion can result from a range of barriers: ■■ ■■ ■■ ■■ ■■

access exclusion – for example, limited availability of or difficulty in securing appropriate services; condition exclusion – for example, deposit or balance levels, identify requirements, etc.; price exclusion – for example, unaffordable charges for services or penalties; marketing exclusion – for example, the way in which products are promoted, their image or mode of delivery; self-exclusion – for example, disengagement as a result of negative experiences or discouragement. (Sinclair 2001)

Financial exclusion is multi-dimensional, encompassing access to, use of and capability in relation to a range of services. This project gathered and reviewed research and other information on the following aspects of financial exclusion in the UK: ■■ ■■ ■■ ■■ ■■ ■■

access to banking services; access to credit; access to insurance; savings and assets; money advice; financial literacy and capability.

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The project did not cover debt, nor poverty and social exclusion more generally; however, these issues inevitably arose in both the literature review and evidence review discussions, as causes and consequences of financial exclusion.

Project aims Financial inclusion is an area of policy where research evidence has already played a significant role. For example, the identification of service withdrawal and ‘unbanked’ communities was initially made by academic researchers (Leyshon and Thrift 1994), and subsequent policy proposals to address exclusion were informed by extensive research and analysis (Policy Action Team 14 1999). The principal aims of the project were to make better use of existing information about financial inclusion; clarify what remains unknown or disputed and identify genuine knowledge gaps; enhance the practical value of research for policy making, and provide an informed platform on which to base future research and policy proposals. A further aim was to improve dialogue between researchers, policy-makers, practitioners, and financially marginalised groups by summarising existing evidence on financial inclusion and recording their respective critical reflections on this data. It was hoped to develop a more rounded understanding of financial inclusion issues through this project by drawing upon different forms of expertise, including the tacit practical and experiential knowledge of service providers, users and financially marginalised groups. Exposing participants to different kinds of knowledge could improve communication between stakeholders, and reduce obstacles currently preventing more effective use of research and other forms of knowledge. The intended outcomes from this project included a more rigorously examined body of evidence, and a reformed research agenda that addresses practical and policy requirements. To achieve these aims and outcomes the project undertook a combination of action research and knowledge exchange activities.

Action research Action research is not so much a methodology as ‘an orientation to inquiry’.1 Numerous techniques may be described as action research, and all share a focus on producing knowledge for practical effectiveness rather than for its own sake. Action research methods are based on the principle that expertise comes in various forms, and that methods to gather information to refine actions should be ‘bottom-up’ and responsive to the conditions under which practitioners operate. Action research therefore favours participative methods of generating information, involving the intended users of research, i.e. policy-makers, those responsible for delivering services and service users. Action research tends to be an inductive and iterative process, in which valid and reliable knowledge emerges through incremental stages of practice and reflection.

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Knowledge exchange The literature on research utilisation and policy-making makes it clear that research itself, without active dissemination, is insufficient to influence decisions (Davies et al. 2002). Furthermore, no matter how rigorously gathered, if research does not address the interests of potential users or fails to communicate findings in an accessible way, it will have little impact (Barnardos Research and Development Team 2000). In recognition of this, research organisations have become increasingly aware of the need to communicate research messages more effectively. This requires applying the principles of knowledge exchange. Effective knowledge exchange is a two-way process, rather than a linear transfer of information from researchers to ‘unenlightened’ practitioners or policy-makers. The first requirement of genuine knowledge exchange is recognising the respective qualities and contributions of different types of knowledge: ■■ ■■ ■■ ■■

formal research; feedback from service users, customers and the public; tacit experience of practitioners and service delivery (‘know how’); reflections of policy-makers and the wider policy community.

(Gough 2006)

Many innovative proposals for service provision reforms (particularly in the private sector) come not from formal research and development processes, but from feedback from customers and service users, or suggestions from front-line service providers. In many cases, practice can be improved or problems better understood by encouraging providers to articulate and reflect on the tacit knowledge they have acquired through experience. Developing a dialogue that transcends distinctions between researchers, policy-makers, and service delivery practitioners requires mediation and brokerage activities (Scottish Executive 2006). Think tanks and applied research centres can assist practitioners and policy-makers with this. A recent review of such centres concluded that their contribution to policy was as facilitators rather than creators. Their influence over policy formulation is now perceived as being chiefly based on their ability to draw stakeholders together and help crystallise thinking around themes or ideas that may already exist, rather than originating new policy initiatives from scratch. (Cartwright 2007: 14)

Research methods To achieve the project objectives, the research team undertook collaborative inquiry with stakeholders in a series of evidence review forums, which analysed systematically gathered knowledge, commentary and policy measures in response to financial exclusion. Participants were encouraged to use their own expertise to analyse this evidence base, question whether it corresponded with their own experiences, and whether it dealt satisfactorily with their key issues of concern. The emphasis throughout was on dialogue, reflection and critical appraisal.

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The project was organised in four stages: Stage 1: collating and summarising findings from research and other published information. ■■ Stage 2: six forums were held where this evidence was reviewed and appraised by a range of stakeholders (September to October 2008). ■■ Stage 3: knowledge exchange conference where the results from these forums were discussed by a wider audience of stakeholders (January 2009). ■■ Stage 4: dissemination – reporting final conclusions and identifying contested issues. ■■

These activities were complemented by an online discussion forum moderated by the project team and hosted on the Scottish Poverty Information Unit (SPIU) website. Although the project involved rapid systematic reviews of evidence on financial exclusion in the UK, the bulk of this report concentrates on stakeholders’ perceptions of these summaries rather than the published research itself. The report outlines the opinions of participants rather than the ‘facts’ about financial exclusion in the UK, and reflects their priorities rather than providing an exhaustive account of these issues. Similarly, the policy and research recommendations outlined in Chapter 5 reflect the views of project participants rather than those of the SPIU research team. Stage 1: collating and summarising research The first task was to undertake systematic searches of the main social science bibliographic databases to produce six précis of the evidence. These databases and references indices were analysed, using a series of search terms, as described in Appendix II. However, these sources did not always record important examples of ‘grey’ literature, nor non-academic sources. Therefore, further relevant information was identified using other sources, for example the bibliography on the website of the Financial Inclusion Observatory (www.fininc.eu). Members of the project team also used their expertise in key areas of financial exclusion (for example, access to banking, money advice) to highlight important sources not included in conventional research databases, including some official reports, policy evaluations and output from the third sector. Using these sources, 7,688 UK publications on different aspects of financial inclusion were identified. It was evident that it would not be possible to read and summarise all of this material to produce short summaries of key points that participants in the evidence review forum could readily digest. It was therefore necessary to select a sample of material to review and present for discussion. Sources included in précis were chosen to provide a representative sample of the literature in the field, and include the most important publications. Therefore the evidence and sources in the précis reflected the following criteria:2 1 They represented the profile and composition of the subject area; i.e. the range of different types of source (by issues, method and approach, type of source, etc.). 2 They were the most frequently cited or apparently influential sources (e.g. key policy documents).

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3 A quality appraisal was carried out: an assessment of the validity, reliability, and representativeness of the research or information base. Stage 2: evidence review forums The information compiled in stage 1 was presented to stakeholders from different sectors in a series of evidence review and feedback forums. The aim of these roundtable discussions was to encourage participants to reflect upon and critically appraise the evidence base on each dimension of financial exclusion, in order to identify areas of agreement over what was genuinely known, and also highlight disagreements and outstanding knowledge gaps. Participants were engaged in semi-structured group discussions to analyse the formal research base and establish: ■■ ■■ ■■ ■■ ■■

whether this information corresponded to or contradicted what they knew from their everyday experiences; which aspects of the existing research and information base appeared valid, reliable and representative, and which did not; whether there were significant limitations to any findings or studies (for example, important questions not posed, deficiencies in methods, etc.); how their experiences explained or otherwise illuminated the research and information base; whether there were issues that, in their experience, were not adequately reflected nor covered in the existing research.

Six evidence review forums were undertaken: three in England (covering a UK remit), two in Scotland, and one in Wales. Participants were drawn from the following sectors: ■■ ■■ ■■ ■■ ■■

central and local government and regulatory bodies (London); advice services (Glasgow); private sector service providers (London); voluntary sector and social enterprises (London, Cardiff ); representatives of marginalised service users/non-users (Glasgow).

A list of forum participants is provided in Appendix I. Stage 3: knowledge exchange conference The outputs from these evidence review forums were summarised and presented to participants (and a wider group of invited stakeholders) for a further stage of review and discussion. This feedback loop enabled stakeholders to consider the respective views of each sector, and discuss the main areas of agreement and disagreement regarding existing knowledge of financial exclusion and varying opinions about outstanding research gaps and measures required to enhance financial inclusion.

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As was the case with the evidence review forums, this conference was a deliberative and participative event, designed to stimulate reflection and dialogue between representatives from different sectors. A list of conference participants is provided in Appendix I. Stage 4: report and dissemination The final stage of any project is usually a report that summarises the main findings and recommends appropriate measures to address issues identified. This project is no different, but as an exercise in knowledge exchange it is also intended to encourage continuing dialogue. The project conference gathered participants’ opinions on dissemination activities and steps to enhance research utilisation; these are discussed in Chapter 5. One form of information exchange developed in the course of the project was an online discussion forum.

Online discussion forum Social researchers have previously used online focus groups and email interviewing as techniques for gathering and generating data. However, this remains an under-used research facility, particularly in applied social policy research.3 In order to provide a wider range of opportunities for an ongoing exchange of opinions between participants, an online discussion forum was created for this project.4 The forum allowed participants to post comments about the project and on financial inclusion issues more generally, and respond to each other. The forum also enabled interested stakeholders who were unable to attend either the evidence review forums or the final project conference to make contributions to the debate. Encouraging information exchange and dialogue between participants across different sectors also accords with the principles of action research and knowledge exchange.

Structure of this report Chapter 2 provides a short overview of the evidence gathered on financial inclusion in the UK, which was summarised in the six research précis discussed by participants in the evidence review forums. Fuller versions of these précis are available on the SPIU website. These summaries were the basis for the group discussions in the evidence review forums, which are summarised in Chapter 3. This highlights areas of agreement and disagreement in relation to the state of knowledge and/or policy reforms, and discusses other significant issues to emerge from these discussions. Chapter 4 examines the discussion and feedback generated by the knowledge exchange conference and online discussion forums respectively. These provided opportunities to reflect on issues raised and opinions expressed in the initial stages of the project, and explored the effectiveness of different means of dialogue and knowledge exchange. Chapter 5 concludes by identifying the agreed knowledge gaps and research requirements, highlights potential policy and practice reforms, and reflects on the knowledge exchange process itself and what lessons can be learned to enable research findings to be utilised more effectively.

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Chapter 2 Financial exclusion and inclusion in the UK SUMMARY This chapter summarises research findings and commentary in six areas of financial inclusion. In relation to access to banking, the number of households without a bank account in the UK has fallen but remains high, particularly among lower-income groups. Basic bank accounts and the Post Office Card Account have been popular, but offer limited services. Mainstream financial service providers do not offer appropriate credit products to lower-income customers, who continue to favour more expensive sources. Credit unions and community development finance institutions have increased in number, but do not yet meet the requirements of marginalised customers. Lowerincome households do not have adequate home contents insurance; while the reasons for this are complex, perceived cost is a deterrent. There is less reliable information on possession of savings and assets than other aspects of financial inclusion, but lowincome households face income and other obstacles that prevent saving. Provision of free money and debt advice services has expanded in recent years, but not enough to meet growing demand. Evidence suggests that many people in the UK are ill-informed about financial issues and do not have the financial skills to make the most effective use of services.

Introduction Each of the six précis produced for this project summarised the evidence on financial inclusion in relation to the following dimensions: ■■ ■■ ■■ ■■

scale, distribution and trends over time; key factors, associations and causes related to the issue; personal consequences and social effects of exclusion; policy and practice responses and proposals for reform.

The following summary is not intended to be an exhaustive review of the financial inclusion literature, but instead provides an outline of the key points. (More exhaustive reviews are provided by Kempson et al. 2000; Mitton 2008.)

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F inancial e x clusion and inclusion in the U K

General features of financial exclusion in the UK Access to appropriate financial services and the knowledge and confidence to use them effectively are indispensable to protect households against risks and allow them to cope with fluctuations in income and liabilities over time. Exclusion from such services or the inability to use them can lead to insecurity. In this respect, financial exclusion is similar to the experience of deprivation more generally, where people are disempowered and unable to control their circumstances. As one low-income householder expressed it, such deprivation means that ‘you feel like life’s doing things to you, you’re not in control of life’ (quoted in Cohen et al. 1992: 24). The Poverty and Social Exclusion survey offered six indicators of financial exclusion: ■■ ■■ ■■ ■■ ■■ ■■

having serious difficulties in paying bills in the previous 12 months; being disconnected from at least one of the major utilities; borrowing money from a source other than banks; not having access to a bank account; being unable to afford home contents insurance; being unable to afford to save £10 per month regularly. (Gordon et al. 2000)

The main elements of financial exclusion in this approach are therefore debt, the lack of a bank account and access to credit, no insurance, and no savings nor pension (see also Kempson et al. 2000). Absent from these indicators is the issue of financial capability, i.e. the ability to use services effectively. This is essential, as financial well-being depends on what individuals and households can accomplish in practice, rather than possessing rights that exist in principle but which they are unable to exercise effectively.5 The causes of financial exclusion are multiple and complex, but may be summarised under three broad headings: ■■ ■■ ■■

market and institutional factors; cultural, social and personal factors; government policy or inaction. (Kempson et al. 2000)

While these factors are not always directly related to lack of income, low income is nevertheless commonly associated with financial exclusion. This is apparent from the profile of financially excluded and marginalised groups. For example, financially excluded households include disproportionate numbers of lone parents, those living in rented accommodation, the unemployed and those reliant on state income related benefits (Goodwin et al. 2000). The high level of financial exclusion among such households reflects the hardship associated with living on low incomes or welfare benefit for prolonged periods. Low income means a lack of effective demand for services; however, this could be interpreted as a failure of supply and the limitations of current service provision. Underlying this interpretation is the argument that there has been a long-term trend within financial services in the UK of a ‘flight to quality’, or a shift away from providing basic credit- and debt-related

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products towards ‘growth orientated investment-related products’ (see Kempson et al. 2000: 16–17; Rogaly and Fisher 1999: 4). The financial service needs of low-income customers became regarded by many suppliers as uneconomic because ‘their needs are modest and the profit margins small’ (see Kempson et al. 2000: 12). Recent research into the viability of establishing a not-for-profit home credit service demonstrated the difficulties of meeting the service needs of lower-income groups (Kempson et al. 2009). Such customers have therefore become a specialist niche market, and the financial services market has polarised over time (Rogaly 1999: 26). Whether there has been a systematic geographic withdrawal of financial service providers from deprived and lower income communities is disputed. Initial studies of geographical access indicted that bank branch infrastructure was poorer in lower-income neighborhoods, and that branch closure rates appeared significantly higher (Leyshon and Thrift 1995). However, an alternative interpretation of these patterns is that the retreat of financial services in recent years has been from less densely populated areas rather than poorer ones (Goodwin et al. 2000). In any case, current debates over the patterns and causes of financial exclusion have moved beyond the issue of geographic proximity to other aspects of service access and standards (French et al. 2008). Similar conditions and issues recur across all six of the dimensions of financial exclusion examined in this project; however, their relative significance varies between them.

Access to banking Holding a bank account is widely recognised as a basic indicator of financial inclusion, and access to banking has been researched extensively in the UK over recent years. A bank account is fundamental to enable full participation in economic and social life: those without bank accounts face higher costs for simple transactions, such as cashing cheques or paying for fuel bills using prepayment meters. Managing household finances is more time-consuming, expensive and insecure without a bank account. The number of so-called ‘unbanked’ households in Britain has fallen significantly in recent years. In 2002/03 some 2.8 million adults in 1.8 million households had no access to a bank account; by 2005/06, data from the Family Resources Survey (FRS) showed that the number of unbanked adults had fallen to 2 million in 1.3 million households. The UK government set a target of halving the number of people without bank accounts (although they have not set a deadline for this); by 2008 they were 60 per cent towards meeting this goal. Although exclusion from banking is not solely determined by income, it is no surprise that low-income groups are least likely to have a bank account: 65 per cent of households with no bank account are in the bottom three income deciles (HM Treasury 2004: 10); ■■ 35 per cent of individuals living in deprived areas lack bank accounts (Brown and Thomas 2005: 2); ■■

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■■

80 per cent of all lone-parent families have a bank account compared to 95 per cent of couple families; only 67 per cent of lone-parent families where the parent works fewer than 16 hours a week have a bank account (Barnes et al. 2005: 178).

Some financially excluded groups do not appear in official statistics, or cannot be identified within them. These include people in or shortly to leave prison; those living in homeless hostels or in shared accommodation; and some migrant workers. Holding a bank account need not itself imply a significant level of financial inclusion, nor that households have moved beyond cash-based financial management. Many of those with accounts remain on the margins of banking, and make minimal use of their accounts: about half of basic bank account holders withdraw all their money each week and manage it as cash. Basic bank accounts were introduced in the UK in 2003 to provide a simple transaction account for customers, including access to automatic teller machines (ATMs), direct debit facilities, and electronic income transfer, but no significant overdraft facility. Although provision varies between banks, in principle basic accounts are available to everyone, and checks on identity and credit history are intended to be implemented flexibly. The Banking Code sets out good practice guidance on operating basic accounts. While the uptake of basic bank accounts has been significant, opinion on whether they can be counted a success is divided. Critics argue that although they are supported in principle at senior levels in mainstream banks, the practice of front-line branch staff varies. For example, a report from Citizens’ Advice claimed that their clients encountered difficulties in opening and maintaining suitable basic bank accounts; these included: ■■ ■■ ■■ ■■ ■■ ■■

bank staff ‘frequently not willing’ to follow government guidance on acceptable evidence of identity; banks failing to promote their basic accounts, and attempts by some bank staff to sell unsuitable products to customers; long delays in opening basic bank accounts at some banks; banks removing money from customers’ accounts to pay bank debts without first checking customers’ financial circumstances; banks levying heavy charges for items such as failed direct debits; banks providing poorer service for basic accounts, such as extended times to clear cheques (Herbert and Hopwood Road 2006: 9).

The Post Office Card Account (POCA) is another measure introduced in 2003 to increase access to basic financial services, and 4.7 million accounts have now been opened. POCA allows benefits (but not salaries) to be paid into and withdrawn from a Post Office, but little flexibility otherwise. The POCA contract held by the Post Office was scheduled to end in March 2010, and there had been some concern about its future. However, the UK government announced in November 2008 that the Post Office would continue to offer a new POCA service, similar to the existing scheme, until 2015. There were calls from several quarters for the account to have greater functionality; e.g. direct debit facilities and standing order payments.

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Evidence on banking access and use suggests that a successful alternative to cash-based money management must provide the level of financial control and flexibility low-income customers require (Toynbee Hall Banking Partnership Group 2008). An essential element of budgeting on a low income is the desire and need to retain maximum certainty and control over finances. Low-income households are very risk-averse (Hirsch 2008a: 11); they also prefer to deal with locally based organisations, both because they offer ease of access and also because they mistrust the involvement of remote financial service providers (Collard et al. 2003).

Access to credit Credit is an essential aspect of financial management for many households, and part of a strategy to cope with income fluctuations. However, 2 million people in the UK (mostly from low-income households) are excluded from the mainstream credit market (Blake and de Jong 2008). Many mainstream credit providers do not provide products suitable for the needs of lowincome borrowers. For example, the minimum loan amounts offered by mainstream lenders are often too high for low-income borrowers, who need to borrow small sums for short periods (for example, weekly repayments). Onerous application procedures and exclusionary conditions can also be barriers to affordable credit for lower-income consumers. Low-income households attach considerable importance to controlling their budgeting, and this flexibility explains the popularity of home credit providers. Many low-income borrowers are aware of the higher cost of home credit, but still prefer it, as it satisfies other important criteria, such as weekly repayment schedules. Low-income households are also more likely to use informal sources of credit (such as family and friends) as a way of managing finances. Any effective policy responses must take account of the features valued by low-income borrowers. A number of factors and circumstances increase the risk of indebtedness for low-income families. These include changes in family composition (such as family breakdown or an increase in family size), redundancy and job loss. Problem debt or experiencing difficulty in meeting repayments is therefore often less related to inadequate financial management, and more attributable to life experiences and events. In addition, the high cost of borrowing from non-mainstream sources can lead some lower-income households into a ‘cycle of indebtedness’ (Bridges and Disney 2004) where high interest rates mean that loans are never fully repaid. Central and devolved governments in the UK have invested in developing the capacity of credit unions to lend to more vulnerable low-income groups. The Financial Inclusion Growth Fund is designed to provide resources for the expansion of third sector lenders, such as credit unions and community development finance institutions (CDFIs). Despite some growth, lending by the third sector remains relatively small scale, and has not yet achieved the capacity where it could be considered to offer a sustainable alternative to existing commercial providers. The Social Fund provides interest-free loans (and some grants); mainly, but not exclusively, to claimants in receipt of certain benefits. Entitlement to Social Fund loans is discretionary for many borrowers, and repayments are usually deducted from benefits. There have been repeated

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demands for the scope and provision of the Social Fund to be extended. The Department for Work and Pensions (DWP) consulted on the reform of the Social Fund in November 2008, including the proposal to use third sector lenders to deliver the service. Further consultation and reforms are scheduled to take place over the course of 2009.

Access to insurance More than half of households with low or very low incomes have no home contents insurance, which is seen as the most basic form of insurance. This compares with around 20 per cent of average-income households, and 10 per cent of high-income households (Blake and de Jong 2008) (see Table 1). Lack of affordability is often given as the main reason for not having home contents insurance, but there is no simple explanation why low-income households do not possess it. Home contents insurance is regarded as important by low-income householders, but inter-linked issues of affordability, a lack of suitable products, and competing domestic spending priorities all influence whether low-income households purchase or maintain home contents insurance. Other important factors for the lack of home contents insurance include the following: insurance companies no longer use doorstep collections and agents; monthly premium payments conflict with weekly budgeting patterns; available products are not suited to the needs of low-income households – for example, minimum sums insured may be too high, as are policy excesses; ■■ low-income households may not have a bank account with direct debit facilities (Burton et al. 2005); ■■ many polices are purchased over the telephone or Internet, requiring a bank account, as well as a level of literacy, numeracy and IT skills.

Home contents insurance

■■ ■■ ■■

Figure 1 Fewer people on low or very low incomes have home contents insurance, compared with those on an average income.

Average income

Low income

Source: Association of British Insurers, 2007.

Very low income

0

22

10

20

30

40

50

60

70

80

90

Note: Very low income is defined by the Association of British Insurers as less than £10,000 per year; low income as between £10,000 and £14,999 per year, and average income as £15,000 to £30,000.

F inancial e x clusion and inclusion in the U K

Those living in deprived areas with a higher risk of crime are less likely than other householders to possess home contents insurance. While there is little evidence of overt ‘redlining’ or postcode discrimination by insurance providers, some commentators have suggested that lower-income households are effectively discriminated against by insurance companies through higher premiums and lack of marketing in certain neighbourhoods (New Policy Institute 2007). Tenants renting from social landlords are among those least likely to have home contents insurance. This is partly because mortgage holders are often required to have buildings insurance, which is frequently sold as a package with home contents insurance. Insurance with rent schemes have gone some way to meeting the needs of social renting tenants, but take-up of these policies remains low (Vestri 2007). They also do not meet the needs of those living in private rented accommodation. Insurance products that suit the budgeting and spending priorities of low-income groups are still required.

Access to savings The importance of savings to household financial stability and well-being is expressed by the Treasury Select Committee: An absence of appropriate saving is a key indicator that people are outside the financial mainstream; effective measures to encourage appropriate saving can play an important role in bringing people into the financial mainstream and giving them greater security and independence. (House of Commons Treasury Committee 2007: 5) Saving is especially important for low-income households that are more vulnerable to disruptive events, such as loss of employment. As well as reducing negative consequences, saving has also been associated with positive benefits: possessing savings provides a reassuring sense of security and has been associated with increased individual sense of worth, and belief in personal control and efficacy (Blake and de Jong 2008: 86). For all its importance, ‘there is more uncertainty around savings than any other issue’ in financial inclusion (New Policy Institute 2007: 21). However, certain facts are known: the FRS found that in 2005/06, 28 per cent of UK households had no savings or assets. This figure increases as income drops, rising to 43 per cent for households earning less than £300 per week. Many low-income households have considerable money management skills. Most low-income households recognise the importance of saving: about 30 per cent of households would like to save at least £10 a month but cannot afford to; this rises to almost 60 per cent for those in the poorest fifth of households (Resolution Foundation 2007: 1).

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The barriers to saving are complex and multi-faceted. Lack of spare money to save is the main reasons given by low-income households for their lack of formal saving: only around 3 per cent of those who assess their financial situation as ‘very difficult’ save regularly (McKay and Kempson 2003). While perceived lack of income is obviously an important reason for lowincome households not saving, this does not explain variations in savings behaviour within low-income groups. Individual employment status is related to savings capacity: 95 per cent of employees, 96 per cent of the self-employed, and 96 per cent of retired people had accounts and investments; this compares with 76 per cent of those registered unemployed and 76 per cent of those defined as ‘other inactive’ (ONS 2007). There are also significant age variations in savings: regular saving is less common among both younger and older groups, than those aged between 30 and 59. Many savings products are not designed for people on a low income, who want to save small amounts. Mistrust of financial institutions, perceptions that financial products are inaccessible, and lack of financial capability are other important causes of a relative lack of uptake of certain savings products. Informal savings schemes (such as saving clubs or Christmas hamper providers) that allow small amounts to be saved are popular among many lowerincome households. However, these do not provide any financial return on savings and are not regulated by the Financial Services Authority (FSA), as they are classified as pre-payment rather than savings systems. This may leave customers’ savings vulnerable to loss without compensation. Nevertheless, the continued popularity of such schemes indicates the demand for flexible and accessible savings products aimed at lower-income groups.

Money advice The increasing acceptability and use of credit over recent years represents a significant cultural change in British society. This has been reflected in the growth of personal credit and borrowing. Total UK personal borrowing at the end of July 2008 was £1,449 billion, a 6.9 per cent increase in the previous 12 months, and a sum greater than total UK GDP at that time (£1,410 billion). Total consumer credit lending to individuals at the end of February 2009 was £231 billion (Credit Action 2008). Money advice services have noted that growing numbers of people are seeking advice for help with debt and money management difficulties. Although there is no generally accepted definition of ‘over-indebtedness’ the Department for Business, Innovation & Skills (BIS) considers that someone is ‘over-indebted if they are struggling to keep up with payments and are suffering real financial hardship as a result’ (BERR 2007). The main reasons households encounter debt and financial difficulties include: ■■ ■■ ■■ ■■

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adverse financial shocks; persistent low income; poor money management; over-commitment and over-spending.

F inancial e x clusion and inclusion in the U K

An unprecedented combination of deteriorating financial conditions in the UK could create further problems of debt and the demand for financial advice. These conditions and factors include: ■■ ■■ ■■ ■■ ■■

record levels of household debt; an end to favourable mortgage interest deals; the ‘credit crunch’ and lack of access to loans and credit; increasing prices for essential purchases (e.g. fuel); falling house prices reducing collateral and creating negative equity.

Concerns about the adequacy of resources and the short-term nature of funding for free-toclient money advice recur in the literature, and several commentaries anticipate that demand for financial advice may exceed the capacity of the sector. The announcement in March 2008 of the launch of a national money guidance service has heightened concern that resources may be diverted from existing advice providers at a time when economic recession affects more people who will be referred on to advice services for crisis support (McAteer and O’Reilly 2008). There is a vibrant commercial advice sector, which is relatively unregulated. These providers have different drivers and their core business involves generating income from household indebtedness, either directly from clients or from their creditors. There are some concerns about the commercial sector’s ability to provide comprehensive money advice, and this may require different approaches in future both in the non-profit advice sector’s approach to promoting inclusion and in the management of standards of debt advice overall (Gillespie and Dobbie 2009).

Financial literacy and capability Financial capability covers a range and depth of skills, knowledge and behaviour. The National Foundation for Educational Research defined financial literacy as: ‘the ability to make informed judgments and take effective decisions regarding the use and management of money’ (Noctor et al. 1992: 2). Financial capability is a broader term than this. It has been defined by the Treasury as: a broad concept, encompassing people’s knowledge and skills to understand their own financial circumstances, along with the motivation to take action. Financially capable consumers plan ahead, find and use information, know when to seek advice and can understand and act on this advice, leading to greater participation in the financial services market. (HM Treasury 2007b: 19) Greater emphasis has recently been placed on financial capability and literacy in the UK than before, as responsibility for managing personal finances and protecting financial well-being has

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shifted from the state to individuals. At the same time, financial services have become more varied and complex. Inadequate financial capability exposes consumers to risks: they may be unprotected against financial hazards, they may face higher costs, and can be denied opportunities to save and benefit from financial products. Few people are fully financially capable across all domains. Individuals may be very capable in some areas but not in others; for example, people with a low income may be excellent money managers but otherwise financially excluded and uninformed about particular financial services. Personal financial circumstances are not straightforward predictors of financial capability. Poor financial decision-making can affect people who do not have low incomes. Among the groups who are poorer at staying informed about financial services and products are those on lower incomes, older people, those without children, and younger people (aged 18–30). Surveys of financial capability in the UK suggest a nation that is poorly informed about financial issues: almost two-thirds of the population has at least one area of financial capability weakness, with just over a third having three or more weaknesses, and one in five weak in at least four areas (FSA 2006). In 2006, some 10.5 million UK adults experienced difficulty in one of the following areas of financial capability: ■■ ■■ ■■ ■■ ■■

successfully making ends meet; keeping track of their finances; planning ahead; choosing financial products; staying informed about financial products.

The UK government set out its long-term approach to financial capability in January 2007. Supply-side policies include establishing a new regulatory framework for the financial sector, introducing simplified, low-cost stakeholder investment products, and promoting financial inclusion more generally. Demand-side policies have focused on improving consumers’ skills and ability to engage with financial affairs through financial education, access to money guidance, information, and advice, and the National Strategy for Financial Capability. The FSA’s Moneymadeclear consumer website (www.moneymadeclear.fsa.gov.uk) has also been created to provide a portal on personal finance issues for the general public.6 Although good practice has been identified in financial capability initiatives, much of this is characterised by a piecemeal approach and short-term funding (England and Chatterjee 2005). Financial education initiatives have not yet been fully evaluated to establish whether they have had a significant impact on individual financial capability. It will take many years before any benefits of financial education in schools show results, and a lack of skills in mathematics and literacy among many young people may limit their financial capability attainment. The benefits of improved financial education also take too long to be an effective response to current levels of financial incapability; regulatory protection that takes account of consumers’ behaviour may also be necessary (Dixon 2006).

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Conclusions The evidence base on financial exclusion in the UK is substantial, complex and dynamic. This formed the basis for structured discussions with stakeholders, who drew upon their diverse experience and practical expertise to reflect on and analyse the state of knowledge.

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Chapter 3 Evidence review forums SUMMARY Participants in the six evidence review forums agreed with much of the evidence summarised in the précis, but also raised several other points. Basic bank accounts were regarded as at best a partial form of financial inclusion, and several participants believed that customers encountered obstacles opening them. Opinion was divided over whether greater regulation of the private financial sector was required to increase customer protection and promote greater inclusion. It is generally agreed that low-income households require credit services that maximise their budgetary control and allow them to borrow small amounts and make flexible repayments. This is an expensive service that neither mainstream providers nor credit unions and community development finance institutions can yet meet. Money advice services are overstretched in relation to demand, and offer services of variable quality. Some participants questioned whether initiatives to increase financial capability distracted from the need for greater consumer protection.

Introduction Stakeholders were particularly interested in two aspects of financial exclusion: access to banking and to credit (with the role of credit unions in the latter case a recurrent interest). Both money advice and financial capability were of interest to particular participants. Discussants generally had somewhat less to say on insurance or savings and assets.

Access to banking A small number of participants queried the apparent lack of evidence regarding the geographic withdrawal of banking services: under-provision and limited branch opening hours were claimed to be a significant problem in remote rural areas. Basic bank accounts were a prominent discussion topic. While generally welcomed, participants from the third sector and advice providers in particular identified limitations with their current operation. Several such participants argued that it was necessary to go beyond access to basic accounts to develop more substantial forms of financial inclusion. They endorsed the evidence that many basic accounts are little more than cash management mechanisms, with one participant estimating that ‘40 per cent of basic bank accounts are

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closed pretty much straight away, and all the money is withdrawn immediately’.7 Another participant summarised this scepticism towards basic bank accounts, there is evidence that people are opening bank accounts but they are not using them. You know, the money is going in and then it is coming straight back out ... So, you know ... we have ticked the box, it is only a basic bank account but it is not being used for any other aspect at all There was also a widely shared scepticism about the idea that basic bank accounts should be the first step in a ‘career’ of increasing services access and use. First, as noted above, it was clear to many participants that banking was not necessarily a gateway of access towards further financial services. Second, some participants questioned whether this was a valid policy objective, particularly if it meant that banks were expected to increase the services they made available to previously excluded customers over time. Private sector participants were prominent among those who objected to this assumption. In particular, any suggestion of the government setting targets for customers to progress from basic bank accounts to other financial services was rejected as based on a mistaken assumption about customers’ enthusiasm for this; that it would potentially deny such customers choice over providers that other customers expected, and may lead to inappropriate sales of financial services or customers resenting banks ‘pushing’ unwanted services at them. A small number of participants went further and challenged the idea that increasing access and use of a range of financial services was necessarily a positive thing. Such critics argued that it was in fact problematic that almost as soon as they were ‘in the system’ some new account holders could be offered inappropriate services (such as credit cards). This is the opposite problem of financial exclusion – a form of ‘over provision’, which was discussed further in relation to credit issues (see page 31). A significant minority of participants claimed that many prospective customers encountered problems opening basic bank accounts, and that for all the official statements from senior banking staff in support of improving access, actual practice in many high street branches was very different. As one participant expressed it, ‘I have heard horror stories about people being led round and round in circles just to prevent them actually getting through the door.’ Several participants referred to personal experience in trying to assist customers wanting to open basic accounts, and anecdotal but widely believed evidence that ‘branches aren’t necessarily that cooperative or that accommodating when people go to open basic bank accounts’. Obstacles referred to by several participants included ‘the forms for basic bank accounts are hidden away’, and bank staff failing to follow Banking Code guidance on appropriate identity verification. One participant suspected that some banks imposed quotas on branch managers of the number of basic accounts that they should accept, although this suspicion was not reiterated by other participants. Participants from the private sector disputed such claims, and argued that significant progress had been made in improving banking access in recent years. Nevertheless, they acknowledged that there was ‘a challenge of making sure that on any policies and procedures, the staff on the ground are fully aware of all the ins and outs of it’. One private sector participant referred

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to mystery shopper research, which found ‘signs that some of those message weren’t getting through and perhaps people were being received quite negatively in branches, but recently mystery shopping has shown that really to turn around.’ Private sector participants also noted that basic accounts were popular not just among previously excluded customers, but were used by a significant number of existing customers as an additional money management facility. Similar reservations were expressed in relation to POCA. Several positive features of POCA were recognised, including the familiarity and accessibility of local Post Offices, and the flexible money management the account allowed: customers ‘know exactly how much money they have got. They budget that way and they can manage that, and understandably they are scared of losing that .... What is the incentive to move to a new system, to a bank that doesn’t really want you? I think they are quite aware of that, they feel really uncomfortable going into banks’. However, there was also widespread agreement that POCA in its current form was ‘unimaginative’ and should have greater functionality. One participant summarised a widely held view about the limits of POCA: ‘in terms of financial inclusion it is useless. It doesn’t perform any great function other than for you receiving benefits or receiving direct payments’. A majority of participants advocated adding direct debit facilities and other bill payment mechanisms to POCA. A small minority of participants suggested that the limits of current approaches to extending financial inclusion had been reached, and that ‘there is this persistent group of people who have not yet engaged with financial services, despite all of the effort and money that was going in over the last 10 years’. Most participants did not accept the suggestion that financial inclusion was at saturation level, and believed that further measures could still reach excluded people. The basic requirement to encourage voluntary uptake of financial services was to identify what in the field of digital inclusion is known as a ‘killer application’ or ‘compelling proposition’: some function which is so beneficial that those currently not engaged will make the effort to access services (Digital Inclusion Champions 2004: 39; Cringely 1996). One participant observed that the main motivation among lower-income groups to open a bank account over the last 10 or so years was that subscriptions for satellite television only accepted direct debit payments. The most contentious issue discussed in the review forums was whether further regulation of financial services was required to address exclusion. A clear division of opinion was evident on this issue between third sector and private sector representatives. Participants from the third sector and social enterprises generally favoured increased regulation and consumer protection. They argued that, as the UK government has withdrawn from providing welfare, there has been a shift from collective to individual responsibility for protecting against risks. Consequently, access to appropriate financial services has become a necessity, and must be regulated: I think that we ought to get back to obligations on the financial services industry. If we accept that credit has become so much more important to households, individuals and to the economy than it ever has been before, then you have to start

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to take on a sort of public utility aspect to credit and regulate it ... providing the obligation in bank licenses to serve local communities will provide new responsible credit products. While private sector participants agreed that responsibility for financial well-being had been individualised, they did not accept the conclusions drawn from this by third sector participants. They argued that ‘more regulation means less choice’ for consumers and would increase the overall costs of services. They disputed the need for legislation to compel private sector providers to improve the availability of services, such as a UK version of the American Community Reinvestment Act. They also argued that the financial services industry contributed substantial tax revenue to the government, and should not be expected to provide services that were a public responsibility, particularly where these compromised commercial interests.

Access to credit A minority of stakeholders raised the interesting point that some users of unregulated financial services and loan sharks had not always been excluded from mainstream lenders; rather, their current exclusion was the last stage in a process of relegation to increasingly marginal credit sources. Many such borrowers were not on low incomes, and their problem was not that they had been denied credit, but that they had exhausted their previous access to ‘irresponsible’ credit and now had unsustainable debts. If anything, they had been ‘over-included’, and their ready access to credit had contributed to accumulating financial problems. It was generally agreed that to eradicate inappropriate credit provision for low-income groups, it was necessary to reproduce the service conditions they required. Where households have little spare income, this means maximum control of resources: it is the element of fear around losing control. Some of the discussions we had with lone parents that were on Income Support was that dealing with your money through a bank account and paying your bills through a bank account could end up making you in a financially worse position. Because, for example, if you pay some of your utilities through your bank account, and then all of a sudden someone decided to claw back money owed, they would end up with huge bank charges; and it really came up quite a lot in discussions that we had. So actually, it was not so much an exclusion but a choice not to use that form of managing money, because somebody could get into your account, and it was a loss of power over your money. Fear of problem debt is particularly acute among those with little room for manoeuvre, and this shapes perceptions across all aspects of finance; for example, ‘People are very worried about the new Employment Support Allowance, because of the sanctions ... it may fluctuate, so they don’t want to set up bank accounts with standing orders, direct debits, because they are seriously worried that the money will fluctuate, putting them into all sorts of problems.’ Similar money management concerns explain the attachment among low-income households to pre-payment meters for utilities, ‘there is the control thing. They will know exactly how

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much it costs to put their washing machine on, so that they are able to budget and act accordingly.’ This reiterates the factors known to underpin the popularity of home credit and doorstep lenders, despite the additional costs involved: ‘the reason we still have people with all sorts of problematic credit [provision] is because that suits some of the needs people are facing, and mainstream services clearly do not. So there is a question about service design, and you can’t drive out inappropriate forms of credit if you are not providing ones that [satisfy people’s needs]’. Participants recognised that providing flexible and accessible financial services for lowerincome customers was expensive. An issue discussed at length in forums was how viable credit unions were as a source of lending to non-mainstream customers. There was general agreement that, in their current form, credit unions and community development finance institutions had neither the lending and asset base nor the capacity to compete with existing home credit providers, particularly in providing a doorstep service or pursuing potential defaults: the expectation is that people come into the credit union, it is the only way that they [unions] can operate economically ... I think there are quite a number of members who are defaulting, they probably don’t mean to default but they are not used to going into a place like a bank and making a payment. And so you have to go door knocking, but it is a very expensive thing to do. And on the levels of income on a £100 or £200 loan, it is totally uneconomic. In addition to proactive doorstep provision, a small number of participants emphasised the importance to credit unions and community development finance institutions of local visibility and accessibility; ideally a ‘high street presence’. This was considered by some as essential to retain brand identity and optimise customer footfall. One participant referred to the experience of a credit union that introduced a telephone service, assuming this would reduce operating costs, but proved to be a business failure as it was unpopular with members. The difficulties in maintaining a ‘local’ presence and a sufficient customer base across remote rural areas were recognised by several participants. It was agreed that credit unions would need to be subsidised if they were to provide a doorto-door lending service. This related to discussions of whether credit unions and community development finance institutions should charge more for providing local credit services. A minority of participants believed that ‘a more grown up debate about the costs of supply’ and acceptable interest rates for lower-income customers was overdue. While some participants thought that charging 40–50 per cent interest was reasonable, given the risk and expense involved, it was generally accepted that many credit unions would reject this in principle: I have had discussions with credit unions where they won’t charge higher risk customers the 2 per cent a month interest cap. They are entitled to do so by law, but they see it as a moral issue compared to charging them 1 per cent for the established customer. It is difficult to say to them ‘well there is a bit of a tension there – you say it is moral to do that, but it is fine to let the Provy charge them 177 per cent’.

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Several participants (again a minority) argued that some customers were prepared to pay fees for a service that suited their particular needs, and that this was preferable to existing commercial alternatives. ScotCash was referred to as an example of a provider that realistically accepted this. Other providers were also praised: That is the amazing thing ... because they are new providers they are a different sort of organisation within the market. They have been able to actually look and say ‘how can we design this to suit the needs of our customer?’ And they have got fees, but transparent fees, right up front, and people know they are going to be paying for a transaction ... it is saying ‘you can have this service but it will cost you this, this and this’. And people don’t mind paying that, because they know straight away they can feed that into their budgeting. While many examples of effective credit unions were recognised, there was a consensus among participants that the capacity of credit unions was variable, and that not all were suited to the challenge of tackling credit exclusion: The reality is, as you know, that every credit union is an autonomous organisation, and it is luck who comes forward as volunteers and who those volunteers then employ when they are in a position to. Do they get the right people? It rests so much on the people who are involved and what particular skills, what particular approaches they want to take. And that is why, more than any other reason, why credit unions vary so significantly from area to area – it’s the ethos, it’s the skills and the experience of the individuals who are running it. Several participants also believed that the management and membership of many credit unions were precarious. As one participant expressed it, many are ‘one heart attack from extinction’ due to the age profile of their members. Increased recruitment of a younger and more diverse membership was required in such cases. Several participants expressed the hope that if this were achieved, credit unions might develop a more extensive range of financial services and improved business practices. There was a widespread (but minority) view that some of the expectations about extending financial inclusion attached to credit unions were unrealistic, especially for unions in the ‘most challenging neighbourhoods’. Some more sceptical participants believed that many credit unions needed to change how they operated if they were to survive, let alone tackle financial exclusion: Credit unions need to be asking themselves, ‘What is it that we want to do? What is it we want to deliver?’ ... Are they going to try and make themselves available to all? In which case they are going to have to operate in a completely different way – they have to offer different things. In this respect, some of the recent reforms of credit union regulation were welcomed as potentially beneficial; i.e. revising the common bond criteria and dividend ceilings, extending

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the range of financial services permitted, and allowing deposits from certain local organisations (such as housing associations).8 Several participants expressed concern that credit unions and similar financial service providers that developed their services and expanded provision tended to move ‘up market’ and leave behind the less commercially attractive potential customers. As they get bigger – they deny it – but there is a greater distance between themselves and lower income and vulnerable groups. Now that is a physical distance, as when they start to centralise their offices .... But it is also cultural. Credit unions by their nature are very much full mutual member led, and as they get bigger they do impressive things, but the people who they were set up in the first instance to support start to become a nuisance to them. The result of this process, it was argued, was that lower-income groups and communities were left under-served, and required a new set of local organisations to be created ‘below’ the market that had been abandoned. I would have to say that the evidence suggests that as credit unions become more commercially aware and commercially covered, the size of the loans that they offer in terms of credit tends to increase .... They move up market – if you look at micro-finance overseas that has been running a lot longer, you will see that a trend in that quite often [is that] as organisations become bigger and more professional ... they lose the commercial–social balance. There was almost universal agreement that the Social Fund did not meet users’ needs and required reform, but no agreement about how this could be done. Participants recognised the potential difficulties of the government becoming more involved in lending: The minute government does something ... it always becomes much more complicated and much more bureaucratically difficult …. If I don’t get a loan from Nat West there is no appeal process. If you had something that is government-run, the chances are you are going to have to have an appeal process. And then you could solve the problems with the current Social Fund and just create new ones.

Access to insurance A significant minority of participants expressed surprise that the research literature included little evidence of insurance ‘red-lining’, and argued that marketing exclusion existed; i.e. that while in a formal sense every household or community might have access to home contents insurance, in practice ‘if it is not promoted to you then are you going to go and get it?’ Variations in the uptake of insurance with rent schemes were attributed to the initiative of local housing managers: ‘the key is that sort of unique person in the social housing provider – if you have a person who is proactive, who understands the importance of the insurance

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scheme, the benefits, the low cost, and can actually – not “sell” it to the tenant – but can just make them aware of the benefits, then that is important’. Some participants noted that ex-offenders faced particular difficulties in acquiring insurance. Most convictions in the UK remain ‘unspent’ for five years, and therefore must be declared in insurance applications. In many cases, only minor motoring offences are discounted by insurance providers; all other unspent conviction can disqualify an entire household from insurance. Approximately 7.3 million people in the UK have an unspent conviction in these terms (Elliott 2009).

Access to savings A small number of participants questioned whether low-income households should be encouraged to save: ‘There is still an ongoing debate in the advice sector about whether or not it’s appropriate to prompt people towards savings. If they live in a very low-income household and they do not have a regular basis of surplus, is it appropriate to talk to them about savings?’

Money advice Participants affirmed the evidence that advice providers were already overstretched, and that demand was increasing: CAB support can’t cope .... When I spoke to a person in [...] I thought she was going to have a nervous breakdown on me. She said ‘do you realise how much work we have got? We don’t need any more’. The ... immediate reaction from CAB was ‘no way – we can’t cope with it all’ you know, ‘just don’t give us any more work’. They are clearly overstretched and it is completely a capacity issue. Several participants also suggested that the type of client seeking advice had changed: There was a discernable change in the client group, because many of the clients, for instance in Bureaux, tended to be socially and financially excluded. But what is happening now is a lot of people that you would rightly or wrongly broadly categorise as middle class – not normal clients of the Bureau – for instance, are becoming a much, much bigger proportion of the work. This shift reflected the impact of the credit crunch and recession. More households were unable to meet commitments they had assumed on the strength of housing equity, or when they had what appeared to be a secure job: it used to be that it would be a life event for people that would cause them to have difficulty meeting their housing commitment – unemployment, illness, bereavement something, like that. But more recently we are finding that people just get to the point where they cannot manage their debts; there are just too many and there is not necessarily a life event trigger any more.

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As with credit unions, a notable minority of participants commented that the quality of service provided by Citizens Advice Bureaux and other financial support services was variable. Some suggested that rationalisation of advice provision in some regions would improve the quality of advice available, money advice is not consistent, not only in how much is on offer but the quality of it. I think that there is scope to have local delivery, but maybe manage it more strategically so that it isn’t so random .... CABs offer very different services in terms of quality in different areas, and have different approaches to things. I think there is scope to have a more strategic management to try and get consistency of approach, but make sure that doesn’t take away from the level of service; that it doesn’t become a cost cutting exercise, but it actually manages the quality of the advice that is given. Participants acknowledged that more resources had been devoted by government to advice services, but also argued that the benefits of this were mitigated by its short-term nature: CAB would very much say that the support for face to face money advice has been very good, but its problem is that it has been short term, and if you are buying in or training and recruiting all those money advisers, and then you can only offer them a job for what turned out to be less than a year, it is a waste of your money really. Finally, several participants observed that providing advice was only a first step and of limited value if clients had no follow-up service support: ‘CABs are rescue launches basically. They are not really educating people, they are dealing with problems that people have got. I think what we have got to get to is a situation where we remove the problems.’ This point relates to the forum debates on financial education and capability.

Financial literacy and capability A majority of participants who expressed a view agreed that teaching financial management skills should be life-long and start in primary schools. Participants agreed that it would take a generation to show the benefits of such sustained training, but that it was nevertheless necessary. Participants acknowledged that low-income households may be adept at managing small budgets, but argued that they did not make informed choices about financial services. In particular, low-income borrowers do not genuinely appreciate the full costs of home credit and other accessible financial sources, the people we see are very good at budgeting but they don’t necessarily make very good informed choices, and that is the difference. We would say that on a week to week basis they manage their money from one week to the other, they have to; but it is about those informed choices, that is where we find the gaps.

36

E v idence re v iew forums

A small number of participants contested what they believed were the underlying assumptions of financial capability and education provision. It was alleged that the implication of financial education was that any deficiency lay within the individual rather than the provider or the market. The assumption that consumers should be educated to respond to the market ignored the fact that some very well-informed customers have suffered at the hands of the market (Equitable Life was mentioned as an example). They believed that this strengthened the case for market regulation and consumer protection rather than education.

Conclusion Overall, participants in the review forums challenged relatively few findings from the evidence base. It was agreed that the existing body of research covered the most important issues and provided a reliable picture of them. It may therefore be concluded that agreement exists about the following aspects of financial inclusion: ■■ ■■ ■■ ■■ ■■ ■■ ■■

basic bank accounts and the Post Office Card Account have both been partial successes in terms of the volume of uptake, but their functionality remains limited; current mainstream credit services do not provide the flexibility and budgeting control, which are paramount for low-income households; the costs of providing accessible lending and credit services to low-income borrowers are not easily reduced; credit unions and community development finance institutions currently have limited capacity to satisfy the borrowing requirements of low-income households; the Social Fund must be reformed if it is to meet users’ needs; demand for money and debt advice is increasing and could become unsustainable in the near future; additional funding for money advice has been welcome but short-term provision has inhibited future planning.

There were a smaller number of issues where the experiences of participants contradicted or qualified the evidence base: the apparent lack of evidence on the absence or withdrawal of financial services from certain communities; ■■ the absence of insurance ‘red-lining’, at least in practical terms, if not as an overt policy; ■■ low-income households may be excellent at managing their budgets (through necessity), but many make ill-informed decisions about financial products. ■■

In addition, certain issues remain contested. These include: whether potential customers encounter barriers in opening basic bank accounts; whether it is appropriate to regard opening a bank account as the first step towards uptake of a range of financial services; ■■ whether further regulation of the private financial sector is required to increase consumer protection or justified to compel provision for currently under-served groups; ■■ ■■

37

E v idence re v iew forums

■■ ■■

■■ ■■ ■■

whether it is feasible to do much more to reach the minority of those who remained unengaged with financial services; whether it is acceptable in principle for credit unions and community development finance institutions to charge more commercially viable interest rates or fees for accessible services to low-income customers; whether Social Fund reform is politically and practically achievable; whether low-income households should be encouraged to save; whether the emphasis on financial capability is a distraction from the need for consumer protection and market regulation.

The most frequent dispute on these contested issues was between the third sector, social enterprises and representatives of excluded groups on the one hand, and the private sector on the other. Government and other public sector representatives tended to favour measures to empower consumers (for example, through extending the range or capacity of alternative service providers, or developing individuals’ financial capability) rather than impose overt controls on the financial services sector. A small number of issues were raised that participants in the evidence review regarded as neglected in the existing evidence base. For example, it was argued that some users of unregulated lenders had not always been excluded from mainstream lenders but had become so after accumulating debt and exhausting their access to mainstream providers. Critics alleged that the problem in such cases was what they regarded as irresponsible lending rather than a lack of it. The evidence review discussions were transcribed and analysed, and a summary of the main themes was presented at the knowledge exchange conference in January 2009. This offered stakeholders a further opportunity to reflect on what was known and what remains contested about financial exclusion in the UK.

38

Chapter 4 Knowledge exchange conference and online discussion forum SUMMARY Participants in the knowledge exchange conference reiterated many of the points made during the evidence review forums, but also raised several distinctive issues. Several examples of successful financial inclusion policies were identified. These appear to have been based on evidence and underpinned by sustained funding. Suggestions for further financial inclusion measures included increasing the value of basic welfare benefits, reform of the Social Fund, and expansion of services available through the Post Office Card Account. The online discussion forum created for the project had 99 members, but there were relatively few active participants, and the forum did not contribute significantly to knowledge exchange.

Introduction The 26 external participants who attended the knowledge exchange conference in Glasgow included representatives from each sector. Following a presentation of the main issues that emerged from the evidence review forums, the following questions were discussed in small groups and then debated among all conference participants: What are the most significant information and knowledge gaps about financial inclusion in the UK? ■■ What policy measures or practice reforms that have contributed to financial inclusion in the UK have been the most effective and successful? ■■ Which reforms to policy or service delivery required to enhance financial inclusion in the UK are the most important or urgent? ■■ What do you think needs to change in your own organisation or sector to enhance financial inclusion in the UK? ■■

The principal issues discussed in relation to the evidence base and the policy lessons to emerge from the conference are outlined below. This is followed by an overview of topics raised on the online discussion forum. Stakeholders’ opinions concerning outstanding knowledge gaps are discussed in Chapter 5 along with the lessons for knowledge exchange provided by this project.

39

K nowledge e x change

Knowledge exchange conference Three amendments to the evidence review précis produced for the project were proposed by different conference participants: The situation of community development finance institutions should be distinguished more clearly from that of credit unions in discussions of credit provision for low-income groups. ■■ The suggestion that credit unions and/or community development finance institutions ‘go upmarket’ when they expand in scale and service provision was questioned. It was argued that credit unions are diverse and operate on a range of different levels, and are more than simply ways of dealing with financial exclusion. The Growth Fund has equipped many credit unions to provide more services for financially marginalised groups than before. ■■ The suggestion that credit unions conflict on occasion with advice agencies was challenged. The Connect project was referred to as an example of collaboration between credit unions (through their trade association ABCUL) and Citizen’s Advice.9 ■■

Participants suggested several examples in response to the question about successes in improving financial inclusion. Among those mentioned were: ■■ ■■

■■ ■■ ■■ ■■

the Social Exclusion Unit Policy Action Team 14 report on Access to Financial Services, which kick-started the policy agendas on access and financial capability; the Treasury’s Financial Inclusion Plan, which gave a national government profile to exclusion, although it was criticised for not being backed up with the necessary resources; the Scottish Executive’s Financial Inclusion Action Plan (2005), which was supported by a budget; teams tackling illegal money lending and dedicated financial inclusion officers following policies based on research intelligence; reforming the regulation of credit unions; the introduction of basic bank accounts.

A feature shared by many of these apparent successes is that they were reforms based on evidence, and – perhaps more crucially – supported by dedicated resources. A dedicated budget and infrastructure to deliver policies in the longer term were regarded as crucial for those measures identified as successful. This point was reiterated in the concern expressed by several conference participants that the creation of the Fairer Scotland Fund in Scotland and the associated removal of ring-marked funding for financial inclusion initiatives were potentially damaging. A number of conference participants pointed out that it was difficult to say which financial inclusion measures had been successful, as several projects had not been properly evaluated. This was especially the case with small local projects. The research and knowledge exchange implications of this are discussed in Chapter 5.

40

K nowledge e x change

Conference participants also identified a number of reforms they felt were necessary. The first was the belief that social security benefits were not adequate to prevent those dependent upon them from becoming or remaining financially excluded. This problem was compounded by a ‘benefits trap’ caused by a lack of flexibility about claimants’ entitlements (particularly tax credits) when their circumstances changed. The risk of income disruption and incurring debt was regarded as a disincentive preventing people taking up employment. A related issue was the reiteration that the Social Fund required reform. This should begin by clarifying its purpose. Several participants argued that some household budgeting crises were inevitable given low benefit levels, and that a Social Fund loan was not appropriate to cover ‘additional’ expenses, which ought to be covered by basic benefits. However, as was the case in evidence reviews, it proved difficult to clarify precisely how the Social Fund should be reformed. In relation to the contested issue of regulating the financial services sector, some conference participants argued that there was a problem enforcing existing regulations let alone introducing additional rules. It was claimed that capacity limitations prevented regulations being effectively imposed. Financial services providers had expressed their commitment to tackle issues of financial inclusion and household debt, but many failed to enact these in practice. It was suggested that it was not regulation that was required to reduce the risk of problem debt; rather, banks should resume their duty to be responsible lenders, including an obligation to refuse inappropriate credit to those vulnerable to default. Participants argued that government should maintain pressure on the private sector to fulfil their commitments, and retain legislative options in reserve if appropriate voluntary action did not follow. The potentially negative effects of regulation were also recognised in relation to a different issue: it was claimed that the money advice sector was obliged to divert staff time and resources from providing services to clients in order to fulfil reporting duties to public funders. In terms of improving access to banking services, one proposal that prompted a stimulating discussion was that Post Offices should provide more financial products directed at marginalised groups. It was suggested that the Post Office network was well placed to improve financial inclusion as it had a presence within communities and a reputation for trustworthiness that other providers lacked. This proposal was raised for further discussion on the online forum. Participants argued that the profile of credit unions needed to be raised, and unions themselves needed to be more accessible to customers if they were to become a viable source of finance in low-income communities. It was suggested that unregulated lenders and loan sharks extracted an unknown volume of money from deprived communities, and that further measures were required to halt this. Providing further support for credit unions in such areas could be seen as an investment preventing this leakage. Several participants argued that UK national standards for advice and information were necessary.10 A smaller number proposed that the possibility of using banks and other private sector providers as impartial financial advice sources merited further examination.

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In relation to financial capability education, several participants welcomed the contribution of Curriculum for Excellence in Scotland to teaching financial skills in schools. An added value of financial education in schools was that it benefited parents, as they became involved in learning alongside their children when they assisted them with their studies. However, it was argued that the needs of children with learning difficulties were not catered for in current financial education provision.

Online discussion forum The online discussion forum went live in December 2008, and within three months had registered 99 members. Approximately 18 different substantive topics were created by contributors for discussion, summarised in Table 1. On most topics, the dialogue was neither extensive nor sustained, although contributions were considered and informed. A number of topics were raised that were not discussed in the evidence reviews or project conference; however, as several of these did not prompt significant exchanges of views, they have not been included in this analysis. Feedback from users and project participants suggests that the evidence précis prepared for the project were considered the most useful contribution to the forum. The forum may also have

Table 1 Online forum discussion topics. Discussion topic

Views

Contributions

Policy opportunities raised by the credit crunch and recession

51

5

Wester Hailes Community Banking Agreement

51

3

Role of Post Offices in delivering financial services

36

3

International data and policy resources on financial inclusion

32

1

Social Fund reform consultation

28

1

Smart meters as a contribution to reducing fuel poverty

22

2

Role of social capital in tackling financial inclusion

21

1

Scottish Parliament Debt Action Forum and measures to prevent home owner repossession

14

1

Savings and asset accumulation among social housing tenants

13

1

Mobile phone banking

14

0

Recent policy developments

11

0

Note: The number of views need not correspond with the number of different participants who checked the topic.

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K nowledge e x change

been helpful to those who posed questions and requests for information. As is the case with most online discussion forums, ‘there are some very eloquent individuals who have a disproportionate input’ (Allen 2009). It is therefore important to recognise that such forums are not representative of the range of views on the issues they cover, and while they can be a useful barometer of opinion, they must be supplemented by a range of other sources. The extent to which the online forum was a useful addition to the project is considered in Chapter 5.

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Chapter 5 Conclusions SUMMARY Project participants identified a number of outstanding research requirements. These included ensuring more end user involvement in research development and design, assessing the long-term impact of reforms, and improving knowledge about local, small-scale initiatives. There is a demand for existing evidence and its implications to be consolidated and disseminated more effectively, to avoid knowledge attrition and duplication of effort. Several participants believed that recent government intervention to support the financial sector provided an opportunity to introduce significant reforms to improve financial inclusion. Other recommended policy and practice reforms were to improve co-ordination of services and support provided to those with financial problems, and use public procurement powers to promote credit unions and community development finance institutions. There is a demand for further knowledge exchange opportunities, particularly for face-to-face interaction and discussions, but a lack of resources limits the capacity of stakeholders to undertake these.

Introduction A principal aim of this project was to clarify the knowledge base on financial inclusion, and some success was achieved in this. It is evident that consensus exists on what is known about the key aspects, scale and some of the causes of several dimensions of financial exclusion. It is also apparent that continuing disputes over other aspect of financial exclusion (for example, the need for further regulation of financial services providers) are based less on the evidence itself than on different values or beliefs about how financial markets and services operate. A positive feature of debates about financial inclusion in the UK is that constructive dialogue across different sectors is possible. While there is not a shared understanding of every aspect of financial inclusion, there is an informed debate about issues of contention, and a relative openness to knowledge exchange. This report concludes by outlining some of the knowledge gaps and research requirements that the project uncovered, and outlining potential reforms proposed by participants. Finally, the knowledge exchange lessons that emerged are considered.

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C onclusions

General themes and issues Participants emphasised the importance of not overlooking the interconnections between the different aspects of financial exclusion; as one participant commented, the financial inclusion issues considered in this project are not ‘six self-contained bubbles’, but share common features. Prominent among these is the importance in many (although not all) of low income as a cause of exclusion. Another way of expressing this is perhaps as a gap between the service requirements of particular groups and the nature of current mainstream provision. In many cases, financial exclusion can be seen as a form of market failure or at least a blind spot, where commercial providers do not supply those whose effective demand is judged inadequate. A common experience of excluded groups is that standard services do not meet their particular or additional requirements. This is a lesson shared with other areas of social exclusion, such as digital exclusion (Sinclair et al. 2007) and transport (Sinclair and Sinclair 2002). In such cases, mainstream services must be adapted or alternatives to these provided; in either case, some form of public intervention is usually necessary to ensure appropriate access to what are considered to be essential services.

Further research requirements A number of participants argued that researchers should involve the ultimate users of evidence in the early stages of project planning. This would ensure that genuine knowledge gaps are addressed and that any research produced is of interest and use to stakeholders. Financial inclusion research is not purely academic or theoretical, but oriented to reform. Therefore, uptake should be an important consideration, and researchers ‘should be engaging with people like Age Concern and Housing Associations to say “We want to do this piece of research, what do we need to be asking? What do we need to know?” Because everyone is different and [otherwise] you get something that is useless.’ Several participants argued that a number of financial inclusion policies have been in place for sufficient time to examine thoroughly their long-term impact. Project participants were keen to assess the effect of policies, identify what measures have worked and what have not, whether there are any behavioural changes resulting from interventions, and how to attribute outcomes to particular actions. Examples of specific initiatives that participants suggested should be assessed over the long term included: the impact of opening accounts on those who did not previously have a bank account, transitions through debt (particularly examples of success in escaping over-indebtedness), and the impact of money advice on well-being and financial capability.11 A second evaluation requirement identified was clarification of ‘how things work on the ground’ and the effectiveness of local initiatives. As was noted in Chapter 4, several participants believed that for many projects, it was difficult to say whether or not they were successful, as they had not been properly evaluated. This was perceived to be a particular problem with small projects in particular localities. In some cases, it was suggested that evaluations of such project had been undertaken, but the lessons from these not communicated effectively, which indicates a need to disseminate information and improve

45

C onclusions

knowledge exchange. Stakeholders were therefore unclear about the effectiveness of alternative delivery mechanisms, such as the pros and cons of providing services by telephone. There was widespread demand among participants for consolidating information about services and research findings in a readily accessible format. This was expressed in two ways. First, there was demand for a local ‘map’ or directory of service provision in an area, particularly debt and money advice services. This should be accessible to the public as well as those with specialist interests. As one participant explained, people needed an understanding of exactly what is going on in terms of providers ... mapping debt advice .... There are so many different things that are happening, and it is really [about] understanding what is happening, and therefore where are the gaps. Second, participants expressed interest in a user-friendly repository of research findings and best practice guides. Not all were aware of the services that currently existed,12 and this was particularly the case among those working in smaller organisations or more involved in front-line service provision. Any such source should maintain up-to-date information on key issues such as the scale of issues, trends over time, changes in the nature of indebtedness, numbers using non-standard financial services (such as pre-payment meters), etc. Ideally, this portal should apply some quality assurance procedures rather than serve merely as a passive repository. The précis produced for this project could serve as a starting point for this, but will soon become outdated, and the resources required to maintain a quality edited database could be considerable. A number of participants expressed interest in developing a more detailed and broader understanding of the consequences of financial exclusion and the effects and benefits of inclusion. For example, several suggestions were made that a ‘social audit’ of the effects of financial exclusion could establish a stronger case for interventions currently regarded as uneconomic using conventional narrow calculations of costs. A number of studies of the social costs of child poverty have already developed such an approach (Bramley and Watkins 2008; Hirsch 2008b). More specifically, it was suggested that a study of the effects of debt on wellbeing could underpin additional support, i.e. the impact of debt or financial exclusion on employment, and in terms of people’s productivity at work – sickness, absenteeism, whether or not they are prone to take risks at work when they are in debt, in terms of taking flexible job opportunities, training or investing in training and [impact on job] mobility. Participants identified several more specific research requirements. A number requested analysis of the impact of credit unions. Among the questions felt to require answers were the socio-economic profile of credit union members and unions’ contribution to financial inclusion among lower-income groups and communities.13 Identifying good practice lessons from the most successful (i.e. inclusive) unions was also advocated.

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C onclusions

Participants identified a problem of service coordination in some areas: ‘there are a huge number of cracks in the pavement where people fall down all the time, and there is a huge amount of risk between one organisation referring to another’. Assessing the value of ‘one-stop shops’, community banking partnership and similar measures to coordinate local financial inclusion services were proposed. The challenges of partnership working (for example, between advice agencies and credit unions) are recognised, but effective measures to overcome these are less well known. There are a number of disadvantaged and marginalised groups whose particular circumstances and service requirements were felt to require further analysis. Among those referred to by participants were: ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

minority ethnic communities; asylum seekers; those with mental health problems; people with learning difficulties; house-bound severely ill or disabled people; older people; victims of domestic violence; people with convictions.14

In fact, there is a substantial body of evidence relating to several of these groups, but it appears that many stakeholders are unaware of this.15 Some participants also expressed interest in learning more about the characteristics and views of ‘people who have not engaged with financial services in any way, why is that, and how can that be addressed?’ In particular, what services or attractions could be developed to encourage such people to take up financial services? Related to this, several participants advocated research exploring the ‘behavioural patterns and psychology of choice’ around financial exclusion and inclusion. This would include processes of individual financial choices, and how aware people are of alternative options. Such research would build upon existing studies of financial literacy and capability, but also provide a better understanding of how beliefs and expectations shape behaviour and responses to different service opportunities or financial circumstances. For example, one participant explained how prior expectations about entitlements and service outcomes can influence individual behaviour: demand for money advice services … depends on what people’s expectations of the resolutions to the problem are. If they think that there is no legal recourse, there is no assistance, then there is no point in going to see the adviser about it and therefore they don’t go. If this is correct, there may be latent demand for services, which will only be realised if people’s expectations and perceptions can be changed.

47

C onclusions

Finally, several participants noted that the changing economic climate could make some people vulnerable to financial exclusion and problem debt for the first time, and that this required monitoring. One participant speculated that the newly indebted may struggle more than those who have learned to survive on a low income: people who have had a bank account ... put in £300 a month minimum, etc., what happens to them when they start losing their jobs? ... potentially that is a group that will cope much worse than people who have been unemployed or people who live on the dole ... they are actually better [able to] manage ... because they are used to it.

Recommendations for policy and practice reforms Participants from the third sector and those representing excluded groups in particular expressed considerable anger at what they regarded as the expense and unfairness of using public resources to rescue ‘irresponsible’ banks and other private sector financial interests. However, many agreed with the view that the credit crunch and ‘part-nationalisation’ of the financial sector also represented a ‘massive political opportunity’ to introduce significant reforms and extract concessions to the advantage of financially excluded and marginalised groups. Few specific proposals were offered, but many believed that there was now greater public willingness, if not demand, for reform of the financial sector: This has been an issue which the mainstream population (i.e. voters) have been able to ignore, and the consequence of that is there hasn’t been pressure on the politicians to play hard ball with the banks, to squeeze concessions .... I suppose the upside of more people being affected by these issues is that you start to get people in marginal constituencies who will be affected by these kinds of problems, and I suppose that will create a bit of a political momentum [for change]. At the same time, there was also widespread agreement that the recession increased the risk of greater financial exclusion and poverty. Participants anticipated both increasing and more longterm unemployment, with more people ‘being parked on £60 a week for indefinite periods’. There was also concern that financial institutions could scale back provision and exacerbate problems of exclusion through imposing ‘more sanctions, more penalties, more conditionality’ for customers. The money management skills of an increasing number of households will be stretched, and therefore several participants argued that financial inclusion must remain a high policy priority – similar to that currently attached to employability. On a smaller scale, participants identified several areas where new measures or ways of delivering support were required. It was argued that local policies and services were not sufficiently well coordinated, and that improved partnership working was required to develop integrated support to households experiencing financial problems. For example, some local authorities and social landlords pursued rent arrears without coordinating with local advice providers (some of which are funded by local authorities), leading to more serious debt problems for households, and additional expense for local public services. It was suggested that developing a shared commitment to embed financial inclusion measures into core activities

48

C onclusions

would substantially improve collaboration between organisations. A number of participants expressed the hope that the new DWP Financial Inclusion Champions would be able to work with agencies to develop better practice in this respect. It was suggested that local authorities and other public bodies could contribute to financial inclusion by stipulating as a condition in their contracts with private financial service providers that they demonstrate inclusive best practice. Indeed, a small number of participants argued that public sector organisations should use credit unions and similar providers to provide their financial support services. To increase take-up of home contents insurance, social landlords could make part of tenants’ rent payment a contribution to insurance. Some participants advocated that while tenants would be able to opt out of this additional charge if they chose (or used another insurer), the assumption should be that they had opted in, and had to actively seek to leave the scheme. Such an opt-in default would increase take up. Some argued that more could be done to publicise the costs of doorstep lenders: there needs to be some sort of awareness and campaigning so that people can see how much it has affected them, not just £5 a week, but over a period of time – what quantity of goods they could have bought with the interest [that] has gone to the Provident, as opposed to through a credit union or whoever else. A recurrent feature to emerge from participants’ reflection was that the effectiveness of many policies and initiatives (for example, insurance with rent schemes, the quality of debt and money advice provision, the capacity of credit unions) often depended upon the characteristics of the individuals or teams involved. This appears to be a common feature of social inclusion policy – in many cases, what works is not so much the policy per se, as the abilities of those who deliver it. This creates a problem of whether effective practice is genuinely transferable in some cases. Furthermore, if the most dynamic and effective local providers are rewarded by promotion, or asked to teach others about good practice, then inevitably they are removed from what they do best, and service quality may be depleted. It is perhaps a task of the Financial Inclusion Champions to fulfil this role; but some means of generalising the work of the most effective practitioners is required. This dilemma has not been resolved in many other areas of social policy, but it is perhaps another knowledge exchange task to identify examples of where it has.

Reflections on knowledge exchange An established lesson in the knowledge exchange literature is that the uptake and use of evidence can depend less on its quality and rigour than how it is conveyed to audiences. This means that communication of research findings should be tailored to the preferences of different types of user. This project provides an opportunity to reflect on and compare alternative forms of exchanging information, i.e. written research summaries, face-to-face discussion groups, a deliberative conference, and an online discussion forum.

49

C onclusions

The project confirmed that action research is well suited to knowledge exchange. Action research is ends-oriented; methods are altered in the course of the project to reach the intended outcomes. Action research cannot be undertaken according to a rigid and predetermined plan, it involves learning-by-doing – reflecting on and adapting processes flexibly. The proposal to develop an online discussion forum for this project was an example of adapting the research process following reflection. It is evident that online data gathering and information exchange will become increasingly important social research tools. However, on this occasion, the online forum did not prove to be a significant additional contribution to the debate and exchange of information. The forum did not require significant moderating; but to stimulate more comments and knowledge exchange would involve more intensive and proactive maintenance, and there is no guarantee that this would significantly increase the degree of interaction. This is not to dismiss the value of the forum entirely: it provided an opportunity for some participants to voice considered opinions that they were not able to convey in other project discussions. Nevertheless, while several participants would welcome an online information resource, it is evident that few have either the time or the inclination to post comments about financial inclusion to online forums, unless they have a pressing need for information. At the moment, this demand for accessible information is best met by other means. Based on feedback from participants, the face-to-face discussions and networking opportunities of the evidence review forums and project conference were more popular than virtual interaction through the online forum. Participants in these events valued the opportunity to discuss their own experience and hear that of others. Those working in social policy making and practice often do not have time to read reports nor contribute to online forums, but they recognise the benefit of knowledge exchange as a source of keeping up-todate with developments, comparing their experiences and learning from others. The challenge is to ensure that there are opportunities for this to happen. The evidence review précis were described as useful summaries by several participants, and their short length and accessible style were commended. A few participants informed the research team that they had passed on some of the précis to a wider circle of associates in order to provide them with a short overview of financial inclusion issues. Unsurprisingly, participants in the evidence review forums had a generally practical orientation to assessing the research presented. They did not systematically appraise research reports, but drew upon their own experience and knowledge to assess or contextualise the evidence presented. There were few occasions when the formal evidence led a participant to question their experience, although discussions involved the usual process of reflection and adjustment to each participant’s comments. There was an interesting but expected difference in the extent to which participants in the group discussions adopted a strategic overview: those more directly involved in delivering services and dealing with customers (for example, advice groups) were less likely than those representing the third or private sector, or public agencies, to refer to macro or ‘big picture’ level issues.

50

C onclusions

Participants in the project conference were asked to complete a short questionnaire to gather their views on the project and knowledge exchange processes more generally. Thirteen completed questionnaires were returned, a number too small to sustain valid statistical analyses, but of some value in indicating general views.16 All 13 respondents described their level of interest in the financial inclusion knowledge exchange project as ‘very interested’, and 12 rated the effectiveness of the project as a means of exchanging knowledge about financial inclusion as either very or moderately effective (the other respondent answered ‘Don’t know’). As noted above, the majority of respondents rated the networking opportunity (six cases) and group discussion (seven cases) as the most interesting aspect of the conference; two respondents selected the presentation of findings from the evidence review forums as most interesting. Among the comments that elaborated on these responses were: ■■ ■■ ■■

‘Hearing from people and organisations I don’t usually hear from is useful.’ ‘The opportunity to have discussion with different people is invaluable.’ ‘Catching up with familiar contacts as well as making new ones is useful.’

Consistent with this, networking opportunity was selected by the greatest number of respondents (seven) as the method regarded as most effective in improving knowledge exchange about financial inclusion. This was followed by email updates (three), newsletters (two) and online discussion forums (two). Other comments provided included the following: ‘Face-to-face opportunities are much better.’ ‘An online forum is a good idea, but will never work as well as meeting people.’ ‘Regular events to explore research and provide learning opportunities’ would be helpful. ■■ ‘Finding ways of encouraging development of relations are the foundation for ongoing exchange.’ ■■ ■■ ■■

Additional forms of knowledge exchange were suggested, including: ■■ ■■

Factsheets; online directory/database.

A lack of time was the most frequent explanation provided by respondents for not using formal methods of knowledge exchange (seven cases). One respondent referred to a lack of resources or capacity, while two stated that they did not know about knowledge exchange process and opportunities, although both were ‘keen to participate more’ following their experience of this project. The final question was an opportunity for respondents to add further comments they had about the project, or suggestions for ways to improve the effectiveness of knowledge exchange about financial inclusion. Most comments reiterated the importance of meeting face-to-face and engaging in discussion. Conference participants were aware that they did not have the

51

C onclusions

knowledge exchange opportunities that they required. Several argued that a more strategic and deliberate system of knowledge exchange was necessary. One suggestion was that mutual references between organisations’ websites would contribute to the flow of information. However, the infrastructure facilitating knowledge exchange should be developed far beyond this. It is evident that small organisations do not have the capacity to keep abreast of research and policy developments nor fully absorb best practice lessons. Equally they are often unable to disseminate their own good practice; as a result, much hard-worn knowledge is under-used or lost. There is a demand for knowledge exchange and learning about developments in the evidence base and in practice, but future provision of opportunities for this must be directed towards a specific purpose and in response to particular information needs rather than generic and abstract training. Stakeholders must first reach the point where they recognise they have a knowledge gap which they must fill before they have any interest in further knowledge exchange opportunities. The issue then becomes how researchers and knowledge brokers can best direct them to the information they require.

Conclusions Financial exclusion is among the most evidence-based areas of social policy research. As was noted at the beginning of this report, the problem in many cases is not a lack of information, quite the contrary, I think the problem for anybody who is interested in … pushing for change ... is the confusing nature of just simply the volume and where to start. If I were kind of looking at a strategic approach, I would invest much more in distillation reports and pulling together the literature on particular issues, and really enabling people to make some sense of it, and to make decisions. One of the aims of this project was to establish what is genuinely known, and what remains unknown about financial exclusion. The project was not able to fully ‘clear the ground’ and establish a secure knowledge base; only a full systematic review would accomplish this. Nevertheless, the project was able to provide reassurance that representatives from a range of sectors accept as sound the general picture currently assumed about financial exclusion, and to identify some research and policy priorities. A second project aim was to encourage dialogue between sectors and stakeholders as valuable in itself. Dialogue across sectors is also already high in this area, partly by necessity: the private sector have a central role in providing financial services and therefore must be included in any response to continued exclusion. This project contributed in a small way to an exchange that must be sustained if progress towards greater inclusion is to be realised. There is a genuine need for improved knowledge exchange – participants believed that knowledge was often lost and best practice ignored due to short-term policy changes and personnel turnover:

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C onclusions

financial education projects have got brilliant things that they can do to work with kids and stuff ... [but] it is really hit and miss whether a new person that gets the post thinks, ‘Oh, wait a minute, I wonder who else is doing this job, I will go and speak to them about it’, instead of wasting time developing their own resources, good or bad. And then finally getting to the kids and giving them the resources, it is maybe six months down the line, and we have wasted six months of funding. Knowledge is a resource that can be depleted if not preserved and recycled. The efforts to acquire it, and the benefits of deploying it wisely are too great to be squandered, but unlike other resources it can be multiplied when shared; this obliges us to accord knowledge exchange a vital role in tackling exclusion.

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Notes

1 http://people.bath.ac.uk/mnspwr/Papers/BriefNotesAR.htm. 2 Research précis will be published separately on the SPIU website at http://www. povertyinformation.org/. 3 Transact operates a financial inclusion online discussion forums at http://www.transact. org.uk/. 4 http://www.povertyinformation.org/forum/. 5 This relates to the Capability approach to the analysis of poverty and deprivation more generally; see Sen, 1999. 6 http://www.moneymadeclear.fsa.gov.uk/. 7 Unless otherwise indicated, all quotations in this chapter are from the project evidence review forums. These discussions were held under Chatham House rules, and participants were assured that no statements would be directly attributable. 8 This claim was questioned by some participants at the knowledge exchange conference. 9 www.abcul.org/lib/liDownload/820/The%20CONNECT%20project%20newsletter%20 21.pdf. 10 These already exist in Scotland; see http://www.communitiesscotland.gov.uk/stellent/ groups/public/documents/webpages/hpcs_006570.hcsp. 11 Michael Orton’s project examining The Long-Term Impact of Debt Advice on Low Income Households will address some of these issues. See http://www2.warwick.ac.uk/fac/soc/ier/ research/current/debt. 12 For example: Money Advice Trust (http://www.moneyadvicetrust.org/); Transact (http:// www.transact.org.uk/). 13 The Scottish Executive (2005) undertook such a survey credit union of members.

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N otes

14 Jones (2008) was referred to by several participants in this regard. 15 See, for example, Mitton, 2007; Gillespie and Dobbie, 2009: and research by the Legal Services Research Centre at http://www.lsrc.org.uk/publications.htm. 16 Some respondents did not answer every question. Some questions allowed respondents to choose more than one option, so responses will not always sum to 13.

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Appendix I: Evidence review and conference participants Evidence review forum participants Helen Anysley Sophie Brookes Jackie Cropper Marion Davis Paul Dornan Jenna Eastlake James Egan Bernie Fallick Cerys Furlong Damon Gibbons Sarah Hatcher Eoghan Howard Bill Hudson Frances Hylanaze Lesley Jones Gareth John Carole King Jo Kirby Jim Lally Shirley Lamb Richard McQuillan Alistair McTaggert Stefan Marx John Milligan Bernie Morgan Brian Rees Claire Welburn Liz Willis Suzanne Wright

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Resolution Foundation Legal Services Commission Grand Central Savings One Parent Families Scotland Child Poverty Action Group Barclays Bank Scottish Drug Forum Glasgow Association for Mental Health NIACE Dysgu Cymru Debt on our Doorstep Financial Services Authority Wester Hailes Fiscal Factor Wales Co-operative Centre ARC UK Wales Co-operative Centre Welsh Assembly Government Provident Financial The Action Group Scottish Centre for Financial Education Midlothian Financial Advice Network Hafod Housing Association Citizens Advice Scotland British Bankers Association Esmée Fairbairn Foundation Community Development Finance Association Bridgend Lifesavers Credit Union Toynbee Hall Renfrewshire Works Bridges Programme

A ppendi x I

Knowledge exchange conference participants Sharon Collard Jackie Cropper Lynn Cunningham Marion Davis Neil Davies Katija Dew Anne Feeney Eoghan Howard Frances Hylanaze Karen Jackson Paul Jones Colin Kinloch Carole King Shirley Lamb Joel Lewis Catriona McKay Sharon McPherson Faith Reynolds Irene Swankie Bronwyn Twizell Danielle Walker Palmour Alisdair Watt Liz Willis Suzanne Wright

Personal Finance Research Centre Grand Central Savings Dundee City Council One Parent Families Scotland South Tyneside Council Financial Inclusion Champion, Wales Financial Inclusion Champion, Scotland Wester Hailes Fiscal Factor ARC UK ARC UK Research Unit for Financial Inclusion Financial Services Authority Provident Financial Midlothian Financial Advice Network HM Treasury Scottish Government Glasgow City Council Toynbee Hall Clydesdale Bank Financial Inclusion Champion, North East England Friends Provident Foundation Glasgow City Council Renfrewshire Works Bridges Programme

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Appendix II: Evidence and literature searches Systematic searches for published evidence were undertaken using seven of the main social science bibliographic resources: Applied Social Science Index and Abstracts (ASSIA) British Humanities Index EconLit Sociological Abstracts Social Services Abstracts Worldwide Political Science Abstracts IBSS

Search 1: Access to banking services Searching for bank* AND ‘financial exclusion’: retrieved 1 item. Searching for ‘financial services’ AND ‘financial inclusion’: retrieved 6 items. Searching for ‘access’ AND ‘financial inclusion’: retrieved 6 items. Searching for ‘financial inclusion’ AND bank* AND ‘low income’: retrieved 4 items. Searching for ‘financial inclusion’ AND bank*: retrieved 18 items. Searching for ‘access’ AND ‘banking services’: retrieved 44 items. Searching for ‘low income’ AND ‘banking services’: retrieved 12 items. Searching for ‘(poor OR low income)’ AND ‘banking services’: retrieved 12 items. Searching for bank* AND ‘(financial exclusion OR financial exclusion)’: retrieved 18 items. ■■ Searching for (bank* AND (financial inclusion OR financial exclusion)) in IBSS only: retrieved 21 items. ■■ Searching for ‘banking’ AND ‘access’ in IBSS only: retrieved 176 items. ■■ Searching for (bank* and access*) AND (financial inclusion OR financial exclusion) in IBSS only: retrieved 5 items. ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

Total items identified = 323

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appendi x I I

Search 2: Access to credit Searching for ‘personal and credit’: retrieved 25 items. Searching for ‘access to credit’: retrieved 56 items. Searching for ‘personal’ AND ‘loans’: retrieved 275 items. Searching for ‘personal credit’: retrieved 45 items. Searching for ‘unsecured’ AND ‘credit’ AND ‘poor’ OR ‘low income’: retrieved 3 items. Searching for ‘unsecured’ OR ‘personal’ AND ‘credit’ AND ‘poor’ OR ‘low income’: retrieved 243 items. ■■ Searching for ‘access’ AND ‘credit’ AND ‘poor’ OR ‘low income’: retrieved 67 items. ■■ ■■ ■■ ■■ ■■ ■■

Total items identified = 714

Search 3: Access to insurance ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

Searching for ‘access’ AND ‘insurance’ AND ‘life’: retrieved 304 items. Searching for ‘insurance’ AND ‘life’ OR ‘personal’ AND ‘low income’ OR ‘poverty’: retrieved 606 items. Searching for ‘insurance’ AND ‘life’ OR ‘personal’ AND ‘low income’ OR ‘poor’: retrieved 561 items. Searching for ‘access’ AND ‘insurance’ AND ‘household’: retrieved 219 articles. Searching for ‘insurance’ AND ‘contents’ AND ‘access’: retrieved 4 items. Searching for ‘insurance’ AND ‘contents’ AND ‘low income’ OR ‘poor’: retrieved 7 items. Searching for ‘insurance’ AND ‘life’ AND ‘low income’ OR ‘poor’: retrieved 425 items. Searching for ‘insurance’ AND ‘life’ AND ‘low income’ OR ‘poverty’: retrieved 419 items. Searching for ‘insurance’ AND ‘personal’ AND ‘low income’ OR ‘poverty: retrieved 279 items. Searching for ‘insurance’ AND ‘personal’ AND ‘low income’ OR ‘poor’ retrieved 222 items. Searching for ‘insurance’ AND ‘home service’: retrieved 2 items. Searching for ‘insurance’ AND ‘industrial branch’: retrieved 1 items. Searching for ‘insurance’ AND ‘friendly society’: retrieved 11 items. Searching for ‘insurance’ AND ‘friendly society’ AND ‘life’: retrieved 7 items. Searching for ‘insurance’ AND ‘life’ AND ‘exclusion’: retrieved 72 items.

Total items identified = 3,139

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appendi x I I

Search 4: Savings and assets ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■

Searching for ‘savings’ AND ‘assets’: retrieved 684 items. Searching for ‘low income’ AND ‘savings’: retrieved 352 items. Searching for ‘low income’ AND ‘pensions’: retrieved 215 items. Searching for ‘low income’ AND ‘assets’: retrieved 313 items. Searching for ‘personal finance’ AND ‘low income’: retrieved 67 items. Searching for ‘stocks and shares’ AND ‘low income’: retrieved 0 items. Searching for ‘low income’ AND ‘stocks’: retrieved 33 items. Searching for ‘low income’ AND ‘shares’: retrieved 61 items. Searching for ‘low income’ AND ‘mortgages’: retrieved 179 items. Searching for ‘low income’ AND ‘wealth’: retrieved 500 items. Searching for ‘deprived’ AND ‘liquid assets’: retrieved 0 items. Searching for ‘deprived’ AND ‘finance’ AND ‘assets’: retrieved 3 items. Searching for ‘assets’ AND ‘income’ AND ‘deprived’ retrieved 8 items.

Total items identified = 2,415

Search 5: Money advice Searching for ‘money advice’: retrieved 16 items. Searching for ‘money’ AND ‘advice’: retrieved 355 items. Searching for ‘debt advice’: retrieved 4 items. Searching for ‘debt’ AND ‘advice’: retrieved 130 items. Searching for ‘financial advice’: retrieved 48 items. Searching for ‘financial advice’ OR ‘money advice’ OR ‘debt advice’: retrieved 62 items. Searching for ‘financial advice’ OR ‘money advice’ OR ‘debt advice’ AND ‘(poor OR low income)’: retrieved 58 items. ■■ Searching for ‘financial advice’ OR ‘money advice’ OR ‘debt advice’ in IBSS only: retrieved 89 items. ■■ ■■ ■■ ■■ ■■ ■■ ■■

Total items identified = 762

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