BRITAIN’S poorest people are being denied access to basic financial services with almost two million unable to set up a bank account, a Lords report published today finds.
A House of Lords committee has condemned the situation as “a scandal” and says it must end.
The Lords’ financial exclusion committee said people are being driven deeper into debt and distress by a “vicious circle” of high costs.
More than 1.7 million people in Britain have no bank account and 40 per cent of the working age population have less than £100 in savings, the committee heard.
People borrowing £100 are having to pay back £156 — more than is charged by disgraced payday lenders.
The committee lambasted the problem of the “poverty premium,” where those who can least afford it often end up paying most to borrow money.
It said that while a recent clampdown on the payday loans industry, which included a cap on charges, has been effective, similar restrictions should be introduced for other types of high-cost credit.
The committee said the government should also appoint a minister for financial inclusion to report annually to Parliament on progress made towards tackling the problem.
Financial exclusion committee chairwoman Baroness Tyler of Enfield said: “The UK financial services sector is a world leader which makes it doubly unacceptable that it is failing those who need it most.
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