Source · Select Committees · Treasury Committee
Recommendation 20
20
The FCA should consider how to improve its engagement with the poorest consumers, including seeking...
Conclusion
The FCA should consider how to improve its engagement with the poorest consumers, including seeking opportunities to improve the availability of data about people who are on the lowest incomes. The FCA must seek data on the issues vulnerable consumers experience directly. Civil society groups and other researchers can provide a valuable input, but they are more constrained than industry in terms of access to funding. (Paragraph 124) Specific areas of regulation
Government Response
Acknowledged
HM Government
Acknowledged
In light of our role and given the scope of our powers, we do not believe that it would be appropriate or feasible for us to advise Parliament or other public bodies on the overall state of financial inclusion, or to make recommendations outside of our remit. Our Financial Lives survey is recognised as one of the most extensive and comprehensive insights into the finances, financial product-holding and financial services experiences of UK consumers. It helps to highlight emerging trends which could lead to consumer harm for us and other stakeholders to consider, including on access and financial inclusion. The survey provides measurement and tracking on several relevant topics, including low financial resilience/ over-indebtedness, debt levels, use of credit products (mainstream and HCC), use of debt advice, access to cash and difficulty in getting to a bank, Post Office or cashpoint. It tells us about who does not have financial products (not least the ‘unbanked’) and who has been refused a product and consumer views as to why they believe this happened. Our most recent survey recently closed, and we will provide the Committee with the report in due course. In light of the Committee’s recommendation, as well as publishing as normal, we will ensure that the results of the next survey are sent to all Members of Parliament, and to HM Treasury in order to support its annual report on Financial Inclusion. We sympathise with the powerful case made by witnesses to the Committee that this is an issue which appears to fall between various authorities. This is because the causes of exclusion are complex and multifaceted and do not sit neatly in one sector. We think any more detailed analysis of inclusion especially one seeking to make recommendations across organisations - would need to look beyond the firm and product level data available to the FCA, looking at factors like entitlement to Government support, credit scores, financial literacy and other elements which affect consumers’ financial circumstances. We contribute to HM Treasury’s yearly report on financial inclusion and support the Government’s leadership on this issue, along with a range of stakeholders. We look forward to discussing with the Government how any additional duty to report on our part could avoid duplication and provide benefit to those who need support the most.