Wednesday, 7 March 2007

Poor Pay More

The Family Welfare Association and Save the Children have issued a new report into the extent to which those on the lowest incomes pay the most for essential services, including financial services.

The report reveals that poor families could pay up to a £1000 per year extra for the most essential goods and services such as gas, electricity and insurance. As the Government struggles to get back on track to meet its child poverty target, the gains being made in terms of increased family incomes are being lost by this poverty premium.

In relation to financial services, the report states:

" While significant progress has been made on financial inclusion,there are several challenges, which are still to be met.Awareness of basic bank accounts remains too low; their use in many cases is limited; and they do not yet meet the needs of low-income customers, particularly around bill payment and flexible direct debit options.The banking industry and government must move faster on pursuing this agenda.While it is preferable that banks take a lead, driven by social responsibility or commercial strategy, the government must be willing to use incentives or regulation where appropriate, to ensure this basic need for suitable banking is met. One specific improvement to basic banking would be the introduction of a £10 overdraft buffer zone."

The report is available at and supporters are urged to e-mail Gordon Brown from the same website.

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