Committee publication · Report · 14 July 2026 · HC 13
2nd Report – Financial Inclusion Strategy
From: Treasury Committee
Inquiry: Financial Inclusion Strategy
Government response deadline: 14 September 2026
Summary
The Treasury Committee's second report examines the government's Financial Inclusion Strategy, published November 2025. While welcoming the Strategy as a necessary starting point, the committee finds it incomplete: it lacks detailed data on who is excluded, where exclusion is concentrated, and why. The report criticizes weak accountability mechanisms, reliance on voluntary industry action without clear escalation triggers, and insufficient consumer voice in implementation governance. It recommends six-month deadlines for publishing quantitative analysis, an implementation framework with baselines and targets, firm-level metrics, and a pilot-to-scale plan.
Key findings
- The Strategy identifies relevant areas (six pillars: digital inclusion, savings, insurance, affordable credit, problem debt, financial education) but lacks the quantitative evidence base to show who is excluded, where, and why—unlike HM Treasury's 2004 financial inclusion report.
- 900,000 UK adults remain unbanked; 13.1 million (24% of all adults) have low financial resilience, concentrated among lone parents, unemployed, those earning under £15,000, and residents in the North-East and North-West.
- Without baselines, targets, named owners, and regular reporting, the two-year review (November 2027) risks measuring activity (meetings held, pilots launched) rather than whether financial exclusion has actually reduced.
- Voluntary action and partnerships cannot drive national strategy where firms consider some consumers unmarketable; industry witnesses acknowledged regulation and government intervention may be necessary for universal access to core products.
- Consumer representatives were outnumbered in practice: the Financial Inclusion Committee met only three times pre-publication with rotating Economic Secretaries; detailed work occurred outside the main committee in sub-groups where industry had greater influence.
Recommendations
- HM Treasury should publish, within six months, a fuller quantitative analysis of financial exclusion's scale, causes, and distribution, drawing on FCA Financial Lives Survey data to identify who is excluded, where exclusion is concentrated geographically, which products/services are unavailable, and why.
- HM Treasury must publish within six months an implementation and accountability framework including baselines, measurable targets, interim milestones, named delivery owners, funding assumptions, and annual reporting to Parliament, distinguishing between administrative activity and outcome measures.
- HM Treasury and the FCA should develop proportionate firm-level financial inclusion metrics focused on largest providers and markets where exclusion causes greatest harm (contents insurance, affordable credit, basic banking), to identify whether progress is consistent across firms and sectors.
- Where delivery depends on voluntary industry action, HM Treasury should set clear triggers for further intervention, explain what evidence or consumer harm would activate existing reserve powers (including on access to banking services in the Financial Services and Markets Bill), and consider whether the Bill needs additional targeted powers.
- HM Treasury should publish a pilot-to-scale plan within six months for each pilot, working group, or exploratory programme, setting out success criteria, evaluation methods, funding routes, decision points, and government actions if interventions work, fail, or voluntary participation is insufficient.
- HM Treasury should strengthen the governance of the Financial Inclusion Committee, its sub-committees, and implementation groups by publishing membership, terms of reference, and meeting frequency; ensure consumer and lived-experience representatives have sufficient weight; and record disagreements with industry-led proposals and how they were considered.
Tone
CriticalTopics
financial-inclusionconsumer-protectionbanking-accessaccountability-governancerisk-based-pricing
Key actors
Dame Meg Hillier, Rachel Blake MP, Mick McAteer, Michelle Highman, Sian Williams, Helen Undy, Jasjyot Singh, Sarah Pritchard
Notable line
“Strategy was "nowhere near ambitious enough" and that there was "nothing in the strategy that the industry would not like".”
Key Quotes
“There are seven representatives from industry or Government and seven from the consumer world and yet, when I thought about what power really looks like, that is incredibly disjointed and unequal in a power imbalance.”
“… the Strategy was "nowhere near ambitious enough" and that there was "nothing in the strategy that the industry would not like".”
“Q273 [Rachel Blake MP] 20 Q6 [Mick McAteer] 5 relies too heavily on industry, and […] does not have the accountability or impact metrics needed to give confidence that it is the step forward that we need for financial inclusion". 21 Evidence base”
“… whether to provide a product or service remained "a commercial decision for firms", and that if government and Parliament wanted universal access to certain core products, "it would absolutely be necessary" to mandate it.”
“… we had three meetings of one hour each before the Strategy was written and one afterwards, with three different Economic Secretaries to the Treasury. The work of informing the Strategy took place outside those meetings, and the imbalance in resources and influence between the consumer organisations and the industry has played out in that.”
“… consistent firm-level publication would show "very quickly if people [were] overplaying or underplaying".”
“Without that analysis, the Government cannot know whether its interventions are the right ones, or whether they are reaching the people who need them most.”
Source · parliament.uk record ↗