What is Financial Inclusion?
What is Financial Inclusion?
Financial inclusion is about more than just having a bank account. It’s the ability to access and use a full range of financial services — from savings and credit to insurance and pensions — in a way that meets individual needs and improves quality of life.
In a fair society, everyone should be able to access these services regardless of their income, background, or personal circumstances. But for many people across the UK — especially younger people navigating early adulthood — financial inclusion is still far from a reality.
Hyfa Foundation believes financial inclusion is fundamental to building a secure future — and we’re working to highlight the barriers that remain, particularly for disadvantaged groups. Through our upcoming policy document, developed by Hyfa Foundation trustee and PhD researcher Calvin, we’ll be exploring these issues in more depth and advocating for change.
What does financial inclusion actually mean?
According to the Financial Conduct Authority (FCA), financial inclusion means ensuring individuals, regardless of background, have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
It's not just about being “banked”. It also means:
- Having fair access to credit at reasonable rates
- Understanding how to use financial products confidently
- Being able to save, invest, or plan for the future
- Avoiding reliance on high-cost or informal lenders
- Having protection in place for life events such as illness or job loss
Yet access is only part of the equation. Inclusion also requires capability: the knowledge and confidence to use financial services effectively. Without it, even those with access can find themselves locked out in practice.
And beyond both access and capability, there is a growing need for product innovation. The current financial system still largely offers a “one size fits all” approach. Many financial products are not designed with diverse or changing consumer needs in mind — particularly for younger people, people with unstable incomes, or those with non-traditional financial histories.
There is an opportunity for financial service providers to go further: to develop products and services that genuinely reflect different life stages, circumstances, and communities. Innovation should play a key role in making financial services not just available — but relevant, flexible, and truly inclusive.
Who is affected by financial exclusion in the UK?
Financial exclusion in the UK often follows the same fault lines as other types of inequality.
- Around 1.1 million UK adults still have no bank account (FCA Financial Lives 2022 survey)
- Nearly 13 million people – around 1 in 4 adults – have low financial resilience, meaning they struggle with savings or coping with unexpected expenses (FCA, 2023)
- Young people face particular barriers. For those aged 16–24, low financial capability, limited access to credit, and a lack of tailored support can make navigating the financial system especially difficult.
Other groups are also at risk. Ethnic minority households, low-income families, and people with insecure housing or employment often face additional challenges. People in financially excluded groups may face higher living costs (e.g. using pay-as-you-go meters or doorstep lenders), fewer opportunities for wealth-building, and greater vulnerability to economic shocks.
Structural barriers: beyond personal finance
Financial exclusion isn’t just about poor budgeting or personal choices. It often reflects deeper systemic barriers — from credit scoring systems that disadvantage renters, to bank ID requirements that exclude people without fixed addresses.
Hyfa Foundation trustee Calvin Cowell has been researching the experience of financial disadvantage among young people in the UK, particularly those from underrepresented or low-income backgrounds. His work highlights how exclusion is often perpetuated by inflexible systems, poor communication from financial institutions, and a lack of accessible, age-appropriate financial education.
Our forthcoming policy document will outline the real-world implications of these barriers and what’s needed to break them down.
Why financial inclusion matters
When people are excluded financially, the effects ripple across every area of life — from housing to education, employment to mental health. Financial inclusion supports:
- Economic participation: People who can access credit, save, and insure themselves are better equipped to contribute to and benefit from the economy.
- Social mobility: A fairer system gives people the tools to plan, invest, and build stability across generations.
- Community resilience: Inclusion reduces dependency on crisis support and encourages longer-term financial wellbeing.
As the cost-of-living crisis continues, financial inclusion is not a luxury. It’s a necessity.
What Hyfa Foundation is doing
We work to promote financial fairness across key life transitions – including starting a business, migrating to the UK, and entering retirement. We also recognise that early adulthood is a crucial period for shaping lifelong financial habits and access.
Our work includes:
- Practical guides and education through our Knowledge Hub
- Awareness campaigns that address inequality and spotlight lived experience
- Policy engagement to influence systems and decision-makers
Our next step is to publish a new policy document, led by Calvin’s research, that brings evidence, lived experience, and practical insight together. This will be an essential resource for professionals in financial services, policymakers, educators, and anyone working with young people and other disadvantaged groups.
Sign up to stay informed
If you’re interested in understanding more about financial inclusion – or want to be part of the conversation around fairness and access – we invite you to sign up for updates. You’ll receive a copy of our policy document as soon as it’s published, along with news from Hyfa Foundation and resources for financial wellbeing.
We want to make financial inclusion not just an idea, but a reality for every young person starting out in life and for anyone facing unfair barriers.
Campaign Launch: Introducing Our 2025 Policy Briefing on Financial Inclusion
Young people growing up in financial exclusion are not lacking potential – they’re lacking access. In the critical years between adolescence and adulthood, access to financial tools, services, and education is more than a convenience, it’s a building block for independence, opportunity, and security.
We see first-hand how financial exclusion continues to harm young people in disadvantaged communities. Many are underbanked, underinformed, and unsupported – often through no fault of their own. Without the right knowledge or resources, they face serious barriers to saving, building credit, accessing further education, or even securing stable housing.
That’s why we’re proud to sponsor a forthcoming Policy Briefing Paper on Financial Inclusion, set to be released in September 2025.
The Urgent Need for Change
New research shows that financial exclusion is not just about lacking a bank account – it’s about being locked out of the systems that allow long-term decision-making. The situation is particularly acute for young people aged 16–25 living in deprived areas, who are often navigating adulthood without guidance, trusted information, or safe financial services.
A 2024 report from the London Foundation for Banking & Finance revealed that 81% of 15–18-year-olds worry about money. For those in communities where financial institutions feel unfamiliar or unwelcoming, the system itself becomes a barrier – reinforcing cycles of disadvantage.
Grounded in Research and Lived Experience
The upcoming briefing paper has been led by Hyfa Foundation trustee Calvin Cowell, whose academic research focuses on financial inequality in the UK. His work brings together quantitative data and lived experience, painting a clear picture of how exclusion affects not just financial outcomes, but also mental health, confidence, and long-term resilience.
Financial inclusion, when done properly, is more than a technical fix – it’s a form of youth empowerment. When young people understand how to manage their money and access safe, affordable financial products, they are better able to advocate for themselves, contribute to their communities, and plan for a more secure future.
What the Paper Will Deliver
The Policy Briefing Paper on Financial Inclusion 2025 will:
- Present evidence-based recommendations for improving financial inclusion in the UK
- Focus on regional strategies informed by lived experience
- Be addressed to key government departments as an open letter
- Make the case for inclusion as a core component of youth policy, not a side issue
This paper is part of a wider campaign to shift how financial inclusion is understood and acted upon – from policymakers to educators, banks to youth organisations.
Get Involved
The message is clear: if we are serious about empowering the next generation, we must start by making sure every young person has a fair chance to build a financially secure future – regardless of background.
We’re looking for:
- Collaborators and co-signatories
- Donors and sponsors
- Organisations working with young people who would like to support or amplify the message
💡 Visit our dedicated webpage to register your interest and stay informed.
For partnership or press enquiries, please contact us at smix@hyfa.foundation
We can challenge exclusion and help build a financial system that works for everyone, starting with those who’ve been left out for too long.