Financial exclusion is where people do not have access to appropriate financial services and products or the knowledge, skills, confidence and motivation to manage their money effectively.
Financial exclusion costs money. Individuals pay more for everyday transactions; without a bank account it costs more to cash a cheque, pay a bill or pay for goods and services, particularly high cost items such as energy. Credit availability is very limited and very expensive, and individuals often resort to high cost lenders to borrow money.
There is strong evidence to show that financial exclusion affects physical and mental health. One in four readers of “Quids In” magazine had become physically ill due to money worries, whilst nearly half have become anxious and depressed.
Households on a low income have an above average likelihood of financial exclusion. These include
In 2011, Experian produced a report for the Financial Inclusion Task Force which ranked every ward in England on levels of likely financial exclusion. It looked at indicators such as income, financial product holdings, affluence, outstanding borrowings, proportion of disposable income spent on fuel mapped against demographic data such as deprivation indices. It also identified those wards with the greatest requirement for affordable credit.
Derbyshire has 32 wards in the worst category for financial exclusion. Of these 18 are amongst the worst 10% nationally. Gamesley in High Peak and Shirebrook North West in Bolsover are in the worst 1% nationally.