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Broadly speaking, financial inclusion refers to the access that people have to financial services such as banking, savings, credit and insurance. There are different definitions, though.

Financial inclusion in Government policy

Financial inclusion has been a consistent and increasingly important strand of Government policy since 1997. But tensions hidden within the broad concept have shaped the direction of policy.

The term financial inclusion fell out of use during the Conservative-Liberal Democrat Coalition Government between 2010-2015 but policies nevertheless continued this agenda. Much of this centred on banking and saving.

Since then, there has also been growing attention to how financial inclusion is combined with financial capability – that is the knowledge, skills and confidence that help people to make financial decisions.

In 2017, the Government created the post of Minister for Pensions and Financial Inclusion. Since 2018, Ministers have co-chaired a Financial Inclusion Policy Forum that meets twice a year.

Financial inclusion may come to the fore given cost-of-living pressures.

Is financial inclusion a good thing?

More widely, there are competing arguments over the merits of financial inclusion as a policy focus. Supporters argue that increasing access to mainstream financial services is important for reducing a poverty premium faced by vulnerable groups. But critics argue that it undermines the welfare state and exposes people to the risks associated with financial markets.

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