What the UK’s new Financial Inclusion Strategy means for financial services firms

The UK Government has released its updated Financial Inclusion Strategy (the Strategy), signalling a renewed focus on how financial services providers can support fair access, resilience, and consumer wellbeing across the economy. While the Strategy includes a number of government-led initiatives, it also sets clear expectations for industry partnership and creates opportunities for firms to lead.

This briefing summarises the key points and outlines the implications for banks, fintechs, insurers, credit unions, employers, and other financial services stakeholders.

A strategic shift: inclusion as a core policy priority

The government frames financial inclusion as essential not only for individuals’ financial stability but for the UK’s wider economic productivity. Financial exclusion - whether through lack of access, poor product design, coercive control, or digital barriers - is presented as an economic drag that industry must help address.

The Strategy is built around three cross-cutting themes:

•    mental health; 
•    accessibility and inclusive design; and
•    economic abuse.

This framing makes clear that inclusion is no longer only about access to bank accounts - it is about ensuring financial products and systems work for people in a wide range of real-world circumstances. For firms, this should prompt a reassessment of product governance, vulnerability frameworks, and user-experience design.

Key developments in the Strategy

Digital Access and Banking Hubs
The government supports the rollout of over 350 banking hubs, in tandem with measures to reduce barriers to account opening for those lacking standard ID.

Industry implication:
Firms should prepare for closer scrutiny of digital-only journeys and consider how inclusive-design principles are embedded - not bolted on. Collaboration with the new banking hubs will also become increasingly important for firms seeking equitable access strategies.  Updating of KYC processes may be essential.

Savings and Financial Resilience
The Strategy highlights employer-facilitated payroll savings and increased support for programmes such as “Help to Save”.

Industry implication:
Banks and fintechs have an opportunity to build or integrate simple, low-friction savings tools. Employers-supported savings could quickly become a mainstream expectation, and firms able to provide embedded solutions may gain a competitive edge.

Affordable insurance
A pilot will be led by Fair4All Finance to understand the uptake of contents insurance among social renters in England, new enhanced signposting to support consumers picking the right cover will be developed, and a working group will be established on the topic of travel insurance for consumers with mental health conditions.  All of these initiatives signal a push to make insurance more accessible.

Industry implication:
Insurers should expect further attention on underwriting fairness, proportional pricing, and gateway barriers for vulnerable groups. This area is likely to become a focal point for regulatory discussion, and early movers may shape the standards that emerge.

Access to affordable credit
The government is investing in strengthening credit unions including the launch of a £30 million fund to support transformation of the market in England. A new small-sum lending pilot will also be launched by Fair4All Finance to help to support those underserved by mainstream lenders. Finally, there are plans to consider extending credit broking exemptions beyond registered social landlords, to capture other organisations who support consumers with their finance.

Industry implication:
There is space for collaboration. Commercial lenders and fintechs may wish to partner with credit unions, design low-cost microcredit products, or support pilots aimed at safer alternatives to high-cost credit. A “responsible small-sum lending market” is likely to evolve rapidly, and proactive participation will position firms advantageously.

Tackling problem debt
With increased funding for debt advice and a push for fairer public-sector debt collection, the Government seeks to reduce consumer harm and ensure that consumers get the right support to help them get back on track with their finances.

Industry implication:
Firms should consider more requirements around early intervention, data-sharing pathways, and more sophisticated vulnerability identification. The regulatory direction of travel favours firms that invest in empathetic collections and strong signposting frameworks.

Financial education and capability
Financial inclusion opens the door to financial services, but financial capability is what empowers people to walk through it - giving them the confidence and skills to manage their money well.  To aid this, the Government has mandated compulsory primary-school financial education (in England) and expanded community-based guidance programmes which aim to raise baseline financial capability.  We will also see increased funding to support those financially excluded and underserved to build their understanding and confidence of their financial matters.

Industry implication:
These initiatives are great for industry as they open avenues for firms to support or sponsor education and capability programmes, which can form part of ESG strategies and community-impact commitments.

What this means for industry: strategic considerations

Inclusion will shape product governance
The Strategy aligns with a broader regulatory emphasis on good consumer outcomes, as seen across the FCA’s Consumer Duty, AI expectations, and vulnerable customer guidance.

Firms should expect inclusion metrics and usability assessments to become standard elements of product design and governance.

Inclusive design will become a business differentiator
The Strategy highlights an industry working group on inclusive design. Firms that embed inclusive UX, accessible communications, and adaptable onboarding journeys will be better positioned for regulatory engagement - and for consumer trust.

Partnership models will become more important
Credit unions, community finance organisations, local authorities, and insurers are all central to the Strategy.

We are likely to see a rise in:

• Hybrid commercial/community lending models;
• Co-created insurance pilots;
• Employer–provider white label partnerships for savings; and
• Fintech integrations supporting affordability and resilience.

Early engagement can shape these models to be both compliant and commercially robust.

Data and vulnerability management will advance
The Strategy’s focus on mental health and economic abuse puts new emphasis on vulnerability identification and intervention.

Firms should review:

• Data capture processes;
• Fair-lending systems;
• Onboarding flags;
• Staff training;
• Third-party integrations; and
• Audits under the Consumer Duty.

Strong vulnerability frameworks will quickly become a core competitive requirement.

Looking ahead: an opportunity to lead

This Strategy is a clear signal: financial inclusion is moving from the periphery of regulatory interest to the centre of policy and market expectations.

For financial services firms, the question is no longer whether to act, but how proactively to engage. Those who lean in now by designing inclusive products, partnering with community providers, and embedding vulnerability-led thinking will be well positioned to influence the market standards that follow.

From a legal and regulatory perspective, we are entering a period where mission-led innovation, compliance, and risk management intersect. Firms that navigate this thoughtfully can support inclusion while strengthening trust, resilience, and long-term commercial performance.

In terms of next steps, HM Treasury has set out a series of outcome-based metrics which will measure success of the Strategy through the impact on:

• UK working age adults who have savings, particularly those with savings between £1,000 and £2,000;
• UK adults who are unbanked;
• Reported use of loan sharks;
• UK adults in financial difficulty;
• UK adults who both need and use debt advice;
• UK adults with characteristics of low financial capability, and UK adults with 
  poor or low numeracy involving financial concepts;
• UK adults able to confidently use online services to manage their money;
• Financial capability of children and young people in the UK; and
• UK adults supported to find an appropriate insurance product through signposting.

We can expect a review of the Strategy against these metrics in 2 years time.

The developments outlined in the Strategy will shape regulatory expectations and consumer outcomes for years to come. Our market-leading financial services regulatory team is advising firms across the sector on how to respond with confidence. We would be pleased to discuss what this means for your organisation and how you can stay ahead of the curve.

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