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£135m for Financial Inclusion Initiative

The Treasury has launched a new initiative that aims to ensure everyone in the UK can have full access to the financial system to manage their finances.

The £135 million action plan for 2008-2011 was launched by the Economic Secretary to the Treasury Kitty Ussher.

It will look to fund a number of programmes that promote financial inclusion. These are:

• £12m to fund dedicated staff to work to promote financial inclusion locally, with a focus on increasing the availability and awareness of home contents insurance for low-income people, in particular in areas affected by the recent flood events
• £76m to fund free face-to-face money advice to financially excluded people
• £38m to increase consumer access to affordable credit through credit unions and other third sector lenders.
• £5m to fund money advice for prisoners
• £2m for a “Save Xmas” campaign to be run by the Office of Fair Trading

The £12m for more affordable insurance will be given to the Department for Work and Pensions who will designate a number of "financial inclusion champions" who will work with local councils, social landlords, voluntary bodies and other key organisations to promote access to insurance locally. The champions will work closely with the Association of British Insurers (ABI) to promote a number of initiatives to low income families including home contents insurance and targeting those living in high risk flood areas.

Talking at the launch of the initiative, Kitty Ussher said that the most vulnerable members of society should not be facing costs that are "easily avoided".

The new action plan will help ensure "everyone is able to manage their money; plan for their future; and have the information, capability and confidence to prevent and deal with financial difficulty."

She Added: "We need to help people cope with financial pressures and avoid a spiral of debt. Significant progress has been made since the Financial Inclusion Fund was first established in 2004, but we can't and won't be complacent - the initiatives outlined in the plan will make a real difference in the lives of financially excluded and low-income people."

The plan builds on the £120m Financial Inclusion Fund established for 2005-08 and the current financial inclusion strategy achievements.