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Financial inclusion, switching and banks: Helen writes for Prospect

Financial health is undervalued

Two million adults in the UK don’t have a bank account. I think that’s staggering.

Of the adults that do have bank accounts, a third have been with their bank for over twenty years. Only one in fifty people switch their main account provider each year. That’s why competition to sign up young customers for their first current account is so fierce. Once you open an account with a bank, chances are you’ll be with them for years—an accidentally loyally customer.

So how do we shape policy to cut financial exclusion and enable customers to get the most out of their banks?

Financial exclusion is a huge, largely invisible problem. In my Durham constituency there is a town of 12,000 people with no bank branch, because low incomes mean their custom is not profitable. The financially excluded pay a “poverty premium” of £1,300 a year because they are forced to meet their financial needs through other methods. For instance, two million people took out a high cost loan in 2012 because they couldn’t access other credit.

To read Helen's article visit Prospect.

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