This item was published during the term of a previous administration that ended in April 2007
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Financial Inclusion Action Plan
18/01/2005
Ways in which organisations are helping people to take control of their finances and access suitable financial services were outlined by the Executive today.
Deputy Communities Minister Johann Lamont said that the Executive is working with banks, local authorities, money advice services and credit unions to increase financial awareness and education and promote innovative new ways to help those without bank accounts, in debt, or looking to save money for the future.
A Financial Inclusion Action Plan sets out how it will ensure more people can have:
- access to bank accounts, affordable credit and savings
- an understanding of their finances, including how to budget for everyday expenditure
- advice and information when they get into problems with debt
Launched Dundee's 'Save by the Bell' scheme, where pupils learn the importance of saving and budgeting while at school, Ms Lamont said:
"The problems that people face in dealing with their finances can be both a cause and consequence of poverty. Promoting good financial knowledge, from an early age, lets people take control of their lives and can lift people out of poverty for good.
"The scale of the challenge is clear: on the one hand, we know consumers are spending record amounts on credit cards, stacking up debts and not saving for their future.
"On the other, more than one in ten adults in Scotland don't have a bank account, excluding them from using basic services most of us take for granted - they can't have their wages or benefits paid in, saving becomes difficult and they can't borrow at a fair rate.
"We need to develop ways in which people, in whatever circumstances they find themselves, can manage their finances in an informed way, while being able to access appropriate products for their needs.
"This could mean being able to get short term or emergency loans from a credit union or banks providing community or mobile banking.
"Addressing the issue of financial exclusion is part of our Closing the Opportunity Gap approach to tackling poverty and deprivation. We want to ensure different organisations work together to promote good financial sense and find creative solutions to those struggling with debt or other financial difficulties."
Jim McCormick of the Scottish Council Foundation said:
"This Action Plan marks a timely step forward for tackling disadvantage. It offers sharper focus around the task of improving financial security among consumers whose credit, insurance and banking needs are poorly served.
"There is significant scope to make faster progress in Scotland. The Action Plan underlines why it is time for both the Executive and the financial services industry to place a higher priority on addressing these issues."
Craig Campbell, Director of Community Banking at Bank of Scotland, added:
"Partnership working is at the heart of what we are trying to do here in Bank of Scotland Community Banking. We therefore applaud the lead that the Scottish Executive is taking here.
"Only by bringing the individual strengths of partner organisations in Scotland together can we hope to deliver on financial inclusion in a scaleable and therefore meaningful way.
"The ultimate goal must be in finding a commercially sustainable route to delivering on this whole issue. If we can then ensure that whatever is delivered is there for the long term, that ultimately will be to the benefit of everyone."
From 2006, £5 million a year will be available to support the activities set out in the Plan.
The Scottish Household Survey shows that:
- 11 per cent of adults don't have a bank or building society account
- 37 per cent of households have no savings
- 40 per cent of households in rented accommodation do not have home contents insurance