Tackling Financial Exclusion with Engage

Measured by GDP (gross-domestic product) the UK may be the sixth largest national economy in the world1 but around 14% of the UK population (approximately 7.1 million people or 1 in 7 people)2 are financially excluded, meaning they lack access to even the most basic financial products and services. 

In fact:  

  • 5.8 million people in the UK have no record of an open or closed money account.3 
  • Almost three quarters of million people have no useful credit footprint, or evidence of financial activity to enable a credit risk assessment, and no UK money account.4 
  • As many as 1.08 million people could be borrowing from an illegal money lender – more commonly known as a loan shark.5 
  • 1 in 4 adults in the UK are expected to experience financial exclusion at least once in their lives.6 

Financial services play a key role in most people’s lives. The vast majority of us rely on money accounts to receive our salaries, pay our bills and when possible, put away savings for the future. While other financial products such as credit, including mortgages, allow us to borrow money for anything from a short-term loan to buying a home.  

Financial exclusion comes at a price, it hurts individuals, disrupts families, and burdens society. Those who are unable to access basic financial services struggle to obtain affordable credit or helpful financial advice, pay more to manage their money, find it difficult to plan for the future, and face barriers in opening and operating money accounts. It makes living on a low income more expensive, unstable and stressful than it otherwise would be, and acts as a barrier to personal development and economic progress.  

For example, without a bank account, people cannot get the discounted prices that comes from paying for gas and electricity by direct debit. Without insurance or savings, it can be impossible to recover from a flood or burglary. And debt problems can lead to mental health issues, family breakdown or homelessness. All of this means that financial exclusion is reinforcing social exclusion for the large part of our population that is unable to access mainstream financial services.7 

On top of this, the UK is currently seeing the highest rate of inflation since the 1980s, bringing with it a cost-of-living crisis and a new wave of misery for millions. 86% of adults now say they are concerned about day-to-day living costs, and just over half (54%) of all UK adults say day to day living costs will have a high or very high impact on their daily lives over the next 12 months.8 

At Engage, our mission is to change the lives of people who have fewer financial choices. Meaning we not only offer access to money accounts, but we partner with the communities we offer these accounts to help them create a healthier and more financially resilient future.  

“A life saver for me. Couldn’t manage without it – as I have no government issued photo ID, I can’t get a bank account or VISA card, so being able to access an equivalent service is a lifeline in modern times.” 

Matt, Engage Customer, Trustpilot Review 

We currently work with over 120 community partners and counting (with new partners signing up every month), including credit unions, small community focused, not-for-profit, financial co-operatives owned and controlled by their members.  

Together with our community partners we offer a suite of products that promote financial inclusion and help people manage their money well with Engage’s accessible digital money accounts supported by a Visa Debit card – the account for anyone, to apply for an account it is a simple as singing up with our partner in your community and taking in two forms of ID. The Engage account is more than just a money-on, money-off account: 

  • We are making it easier for people to take the step away from financial exclusion towards inclusion, by having access to a money account that allows Engage account holders to receive loans from our ethical banking partners or to send money to their community bank account to save. 
  • Our envelopes money management tool empowers Engage account holders to master their money and create healthy financially habits by allowing them to set aside a monthly budget for different bills and expenditures in secure virtual envelopes, so they are only left with disposable cash to spend. 
  • Our rewards program allows Engage account holders to earn cashback rewards with selected national retailers and local businesses*, meaning that they could save hundreds of pounds by using their Engage account.9,10 

Engage is driving an evolution in community banking by empowering our community partners to compete on a technological level with the better funded big banks and fintechs, so that together we can work to end financial exclusion and provide financial opportunity for all. Find out more about us here. 

Author: Geoff Leech, Manging Director, Engage 

*Rewards on offer may vary.