Fair by Design
Fair4All Finance and WPI Economics have launched a report titled Financial inclusion and growth. The report sets out how financial inclusion can be a core part of achieving the UK Government’s growth mission.
The report looks at three key areas; savings, car insurance and better financial wellbeing, and argues that greater financial inclusion in these areas leads to increased growth.
In the case of car insurance, removing the poverty premium would generate an extra £369 million per year for the UK economy. Over the course of this Parliament, UK GDP would be £1.5 billion higher as a result.
This report follows the recent launch of Fair By Design’s new position paper week titled Driving Change: Policy Ideas to Tackle the Car Insurance Poverty Premium.
Fair By Design’s Director, Rebecca Deegan, said:
“The new analysis by Fair4All finance is further evidence that investing in financial inclusion is good for people and good for the economy.
“Too many people are excluded or are charged more for essentials, paying a poverty premium because of factors they cannot control, such as where they can afford to live.
“For instance, people living in deprived areas can pay over £300 more on car insurance per year than those living in more affluent areas. But as this new research shows, tackling the poverty premium in car insurance can grow the economy by hundreds of millions of pounds per year.
“This should be a no-brainer. This is growth that puts money back into people’s pockets. We urge the Government to be bold as it develops the Financial Inclusion Strategy over summer, and include concrete actions to reduce poverty premiums in insurance and credit.”
Fair By Design is looking for a Public Affairs Manager to lead its engagement with political stakeholders, regulators, and industry bodies to influence policy and regulatory change. Fair By Design puts people with lived experience at the heart of what it does and strives to leave a legacy where being inclusive in the design of policy, regulation and services is the norm.
Full-time fixed term contract of 3 years with the possibility of renewal.
28th April 2025 – there’s a feeling of excited tension as Fair By Design and Poverty Alliance staff log into a Teams meeting room at 9:45. It’s not often a Monday morning meeting has us excited, but this one feels a little different.
As the clock ticks over to 10:00, 15 people join the call and meet each other for the first time – these 15 people are our new lived experience advisory group. The group will draw on their experience of the poverty premium – the extra costs faced by people on low incomes – to help guide our work.
Over the course of two hours, everyone introduces themselves, we hear what has made people smile in the last week and get to know each other’s pets. Shared values and motivations for taking part come to the fore as we discuss the purpose of this group.
It’s clear there is a feeling of frustration, and sadness at other panel members’ difficulties with benefits and companies who haven’t supported them in the way they should have. But overwhelmingly, there’s a shared sense that things need to change.
Who’s around the table
The panel is made up of 15 people from across Great Britain, with representation from England, Wales and Scotland.
It includes a diverse range of people to ensure those most disproportionately affected by the poverty premium are represented. We know that some communities are particularly at risk of paying a poverty premium for household essentials, so we’ve made sure that there’s good representation from those communities on our panel.
The aim is to create a safe, supportive and collaborative environment where everyone feels empowered to contribute their experience and knowledge of poverty-related issues.
Support and training will be provided to help build confidence in speaking up – whether to politicians, the media, or in meetings.
Panel members are being reimbursed for their time, with options on how they receive this. We understand not everyone wants financial compensation, so other benefits are available. This is our way of recognising the value their lived expertise brings to our work.
What we’re going to do together
Over the next year, the panel will meet five times to help shape and guide our work. It will sit alongside our existing governance structures, our steering group and the Barrow Cadbury Trust Board.
The panel’s experience will input into all areas of our work. This will include helping us set priorities by identifying which issues are affecting people most, what we should focus on, and what we might be missing.
They will also help shape our policy work by advising where further research is needed and what type of work we should undertake.
In addition, panel members will guide our research by working alongside academics and staff from other organisations to help shape individual research projects.
We’ll also support those who are comfortable sharing their voices and lived expertise through blogs, videos, social media, media interviews, or public speaking.
Conclusion
We have a strong track record of working with people with lived experience in our communications and policy work. But we want to go further – making lived experience a central part of shaping our strategic work.
Over the next year, the voices and experiences of these 15 people will be at the heart of everything we do. Keep an eye on our work to see how their insight is helping shape change.
If you’d like to learn more about the process, or how to set up a similar panel, please get in touch.
Financial Inclusion in the UK 2024
The Centre on Household Assets and Savings Management (CHASM) at the University of
Birmingham was commissioned by the Financial Inclusion Commission to undertake a rapid review of financial inclusion. This report provides the findings of that work, focusing primarily on evidence published between January 2022 and March 2024 due to the significant changes in the economy in recent years, including COVID-19 and the cost of living crisis.
The full review looks at financial inclusion both in terms of the types of products and services
required and the groups of people most likely to be excluded, before making suggestions for
potential approaches to tackle exclusion – preferably within the framework of a national strategy.
This annual overview highlights key findings and possible approaches – again with the intention that these
are incorporated into a national strategy for financial inclusion.
Today Fair By Design is launching its new film featuring people with lived experience of the poverty premium in payments.
Everyday millions of payments are made in the UK, from online transactions to cash in shops. They are an essential part of life today. However, some payment methods create a poverty premium, meaning people are charged more for the way they spend their own money.
Fair By Design’s latest lived experience film highlights this injustice through three stories looking at energy, car insurance and access to cash. These stories show that people in poverty are charged more for essentials because of the way they pay for them.
The film builds on work on the poverty premium in payments, and how people in poverty can access fair and flexible methods of payment. You can read a full paper on the issue here.
Today Ofgem, the energy regulator, announced a lasting solution to eliminate the extra costs for paying for energy using a prepayment meter. This announcement is a big win and follows years of campaigning for this poverty premium to be eliminated.
Ofgem also said it had not made a final decision on the extra costs for people who pay for energy when they receive their bill. It plans to continue to explore how to tackle this issue and will publish a consultation by the end of the year. If implemented, a reduction or end to this extra cost would happen from April 2025.
Maria Booker, Head of Policy, Fair By Design, said:
“This is a big win for people on low incomes. Today’s announcement introduces a lasting solution. We welcome recognition from the regulator that people on low incomes should not pay more for their energy.
“We also welcome Ofgem’s intention to bring down the premium for paying on receipt of bill, even if not as soon as we had hoped.
“But the extra cost for those who pay when they receive their bill still exists. We want to see this completely eliminated and will continue to push hard for this change to happen.”
The pricing and tariffs are over complicated on purpose. Energy companies have far too much power for an essential service.” – Lived experience focus group participant, April 2023.
The Energy Security and Net Zero (ESNZ) Committee has launched an inquiry to investigate the process of billing customers for their gas and electricity, to look at whether the rules on charging for energy are fair for all. The Committee wants to understand how a social tariff should be implemented to address inequalities in billing.
In our consultation response, we set out a wide range of policy solutions to create a fairer domestic energy market, emphasising the need for Ofgem and the Government to prioritise the interests of low-income consumers. This includes:
- Introducing an energy social tariff as soon as possible. There is an ongoing affordability crisis in energy. Prices are forecast to remain significantly above their pre-crisis levels for many years to come. The Government needs to urgently honour its commitment to consult on introducing long-term bill support for those least able to afford their energy.
- Reforming standing charges as they are too high. Ofgem should look to recover the fixed costs of the energy system in a fairer way.
- We would like to see an end to premiums for different methods of payment, particularly when those methods of payment are disproportionately used by those on a low income (“poverty premiums”).
- We would also like to see regional differences in energy prices abolished. People on low incomes have told us that they want the energy system to be less complicated and fairer.
Our full consultation response notes in further detail our policy asks.
Fair By Design are part of a coalition of Charities and groups calling on the Government to re-commit to the policy as part of a permanent solution for fuel poverty in the UK.
New analysis by Age UK has revealed that 2.2 million households would not be living in fuel poverty this winter – a reduction of around 65% – if the Government had implemented an energy social tariff to help the most vulnerable energy users in society.
Despite repeated promises from the Government to consult on an energy social tariff they have failed to follow through on this commitment, letting down millions of people in fuel poverty who are still in desperate need of support.
A Coalition of Charities, Age UK, Scope, Fair By Design, Mencap, MND Association and Sense, warn that the cost of living crisis is still adding huge pressures to household finances, with millions facing the dilemma of how they’re going to pay their energy bills this year.
Read the rest of this release on Fair By Design’s website.
The Labour Party has published its Financial Services Plan, a blueprint laying out the party’s plans for financial services if it wins the next general elections. The plan mentions poverty premiums as a consequence of lack of access to financial services and pledges to develop a national financial inclusion strategy, something Fair By Design have long called for.
The plan also includes commitments in other areas Fair By Design campaigns on, such as flexibility in payments; access to cash; exploring the need for alternative sources of credit for households, such as financing from community development finance institutions; and regulating Buy Now Pay Later.
Martin Coppack, Director, Fair By Design, said:
“I’m incredibly pleased to see that the Labour Party has listened to Fair By Design and our partners’ calls for a national financial inclusion strategy. A strategy would give any party who wins the election the chance to make meaningful change to the lives millions of people who are excluded from financial services in the UK, or who are charged more for being poor.
“Labour’s plan acknowledges the link between financial exclusion and poverty premiums, which is a great start. Any future strategy will need a clear commitment to end poverty premiums.
“I call on all parties to make tackling the poverty premium part of their manifestos.”
“It’s absurd that standing charges are such a large part of bill. The whole way that energy is purchased and passed to customers is absurd” – Lived Experience focus group participant, April 2023.
Since 2021 standing charges for domestic electricity customers have increased significantly. For people who pay for their electricity bills by direct debit, they have more than doubled from £86 to £186 per annum on average between 2021 and 2023.
In this consultation, Ofgem has asked for input in response to concerns about the high level of standing charges.
We would like to see standing charges reduced and the fixed costs of the energy system recovered in a more progressive way. However, we recognise that some low-income groups would be adversely affected by such a change if not accompanied by other measures.
In addition to this, we want Ofgem to look at addressing standing charges that accrue when people on low incomes go off supply to save money.
Our full consultation response notes in further detail our policy asks.
