Thought leadership

The divide between Britain’s “haves” and “have-nots” has widened in recent years, a report says. While more people have benefited from workplace pensions and rock-bottom mortgage rates as the economy has recovered, at the other end of the spectrum more have been existing without bank accounts, resorting to food banks and being evicted from their homes, the University of Birmingham report said.

It said: “The experience of the recovery and financial inclusion remains very unequal. Some people are benefiting from economic growth and greater financial inclusion while many others are struggling ever more and being financially excluded.”

The report said people who are “financially included” should be able to manage day-to-day financial transactions, meet both regular and surprise expenses, manage a loss of earned income and avoid or reduce problem debt.

The research, funded by charity the Friends Provident Foundation, found that 1.7 million adults had no access to a bank account in 2013-14 – a 14% increase on the previous year.

The Financial Inclusion report also said that in 2015, there were more than 41,000 landlord evictions from rented properties in England and Wales, up from 27,000 in 2010, as more people ran into difficulties paying their rent.

It said that in 2015-16, 1.1 million emergency food parcels were given out by food banks, compared with just over 61,000 in 2010.

More than six million people have started saving into a workplace pension as a result of automatic enrolment, the scheme launched in 2012 to encourage people to save for their later years.

The recent cut in the Bank of England base rate to 0.25% has also made mortgage costs cheaper for many home owners. Repossessions have been on a downward trend in recent years.

The report also pointed to figures in the 2012-14 Wealth and Assets Survey, showing that one in five households had more debts than savings, and at the opposite end of the spectrum, more than one in 10 households had £100,000 or more of net financial wealth.

Karen Rowlingson, professor of social policy at the University of Birmingham, a co-author of the report, said: “There is an increasing gap between financially excluded people struggling with day-to-day finances and those with mortgages and secure jobs who have benefited from economic recovery following the crash in 2008.

“Financial inclusion has improved for some people who are now able to meet the expenses that life throws at them, whilst avoiding problem debt and even strengthening their financial position.

“Meanwhile, others suffer financial exclusion – they don’t have a bank account, rely on food banks to feed their families and face losing the roof over their heads.”

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