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Economic Justice

How can essential services – insurance, energy, credit – be designed for everyone?

A new programme of research led by Fair By Design and the Money Advice Trust is set to explore the issue of inclusive design in credit, insurance, energy and other essential services markets.  Inclusive design is the practice of designing products and services to ensure they are accessible to, and usable by, as many people as possible.  Regulators are increasingly focusing on these issues, with the importance of product and service design recognised in recent publications from the Competition and Markets Authority, Financial Conduct Authority and Ofgem. This Inclusive By Design project, launching this month, will publish two reports in 2020 explaining how regulators and businesses can adopt inclusive design strategies in their work.

There is not, however, a well-developed, shared understanding of what inclusive design means in the context of financial services, energy and other essential services, how it relates to current regulation and UK law, or how it should be incorporated into the work of regulators and businesses. The Inclusive By Design project, a partnership between Fair By Design and Money Advice Trust, aims to fill this gap by providing research and practical resources for regulators and businesses operating in the credit, insurance and energy markets in particular.

Martin Coppack, Director of Fair By Design said:

“Essential products and services are almost all still designed for the ‘perfect consumer’ – who never becomes ill, always has a steady income, is able to understand complex terms and conditions and always has the time and technology to easily find the best deal for them. We all know this myth does not stack up in reality. We know that how products are currently designed also means that someone can pay more for an essential service simply because they are poorer than their neighbour – they, in effect, pay a poverty premium.

“Inclusive design is an emerging area for essential services, but there is a great deal of work in other contexts that we can draw on in developing a strong agenda in credit, insurance, energy and other markets. We look forward to engaging with a broad range of stakeholders over the coming months, and sharing the results of the programme throughout 2020.”

Joanna Elson OBE, Chief Executive of the Money Advice Trust, said:

“Good progress has been made on improving the way vulnerable customers are treated in sectors like financial services and energy. At the Money Advice Trust we have now trained more than 21,000 members of staff and worked with over 250 firms on supporting customers in vulnerable circumstances, and this agenda is continuing to grow.

“However, regulators and businesses also need to look ‘upstream’ at the way that products and services are designed in the first place – to ensure they work for all customers, including those who are vulnerable. We look forward to working with Fair By Design to explore this important issue further, including producing practical guidance for businesses next year.”

People in poverty pay more for products and services. This includes expensive energy tariffs, high cost loans, rent to own products such as household appliances, and insurance in deprived areas. This is known as the poverty premium. Fair By Design (FBD) is a movement dedicated to reshaping essential services, like energy, credit and insurance, so they don’t cost more if you’re poor. Fair By Design’s vision is for a UK where poor and low income people pay a fair price for essential services.

The Money Advice Trust is a charity which helps people across the UK tackle their debts and manage their money with confidence. The charity runs National Debtline and Business Debtline, which last year provided help to more than 204,000 people by phone and webchat. In addition to these frontline services, the charity provides training for the advice sector through Wiseradviser, works with commercial organisations to help them identify and support their customers in vulnerable circumstances, and works closely with government, creditors and partners to improve the UK’s money and debt environment.