Confidence and control the key to better financial health

16th March 2015

At Keep Me Posted we’ve known for some time that the move towards digital financial services can create new barriers for those who are excluded from such technology, such as the elderly, those in rural areas and people with poor digital skills.

Now the Financial Inclusion Commission - an independent body of experts and parliamentarians who came together to put financial inclusion back on the political agenda – has launched its report on improving the financial health of the nation, and has some wise words for us and for the forthcoming Government it wants to adopt its recommendations.

The report acknowledges that even though many people are happy using technology, they may simply prefer to manage their finances through more traditional means. It also recommends that for those who do not want to use technology, other services must remain available.

The Commission argues that exclusion from the financial mainstream often means people paying a “poverty premium” of hundreds of pounds more than those who use the internet, as they can’t access cheaper online deals or shop around as easily. Conversely, when people are financially included, they have more confidence and control, and are less likely to experience debt and financial difficulty.

Given that the Commission agrees that confidence and control are key to better financial health, doesn’t it seem perverse that so many people are being denied both of those things by being forced online? We hear many stories at Keep Me Posted from people who have been migrated to a service they cannot use as they don’t have the internet. The onus is then on them to try to wrest back control of their own finances, often by paying to keep a paper bill or statement.

Then there are the ones whose families have helped them move to an online service simply because the cost is cheaper – for instance many energy deals are only available online – but then have to rely on the other person to keep them in touch with their bills. That’s the opposite of taking control of your own finances. As JS of Surrey told us after using her own email to sign up her mother to a paperless scheme which saved £50 per year, “a little bit of her independence and privacy has been eaten away as she has to rely on me, her daughter, to advise her when her bill is ready, print it off and remember to pass it on”.

Control means knowing what your own finances are like, and being able to make decisions about them. Our own study showed people who used paper to analyse a bank statement were more than twice as likely to recall their current statement balance, and also made better financial choices than those receiving the same information online. If paper bills and statement can be one step to financial inclusion, then it seems very short sighted that so many services are insisting on trying to take it away.

Judith Donovan