Christian Guy

Britain’s banks fail the poor

Britain’s banks aren’t working for the poor. We, the better off, might moan when our internet banking crashes or in-branch mortgage advisers can’t meet us on Saturday mornings; but these are frustrations the poor can only dream of. The individuals and families most in need of ethical finance, clear rules, reliable advice and appropriate products, have almost nowhere to turn on our high streets today.

As a result some people never bother: 1.4 million people in the UK have no transactional bank account. For others, the banking industry’s hidden charges, penalties and standard fees mean they crash out of mainstream finance in even worse shape.

Exasperated and bruised, many turn to the kind of people you wouldn’t want looking after your grandmother. Ruthless legal and illegal lenders, free from ethical competitors, swarm around the vulnerable and the worried. Almost one million people say they use payday lenders because they can’t get credit elsewhere. And the broader high-cost credit market, including pawnbrokers and home-collected credit, has grown by billions of pounds in recent years.

Exclusion from banking is only one concern for those considering personal indebtedness in Britain. We have a problem. Household debt has almost doubled in a decade to £1.44 trillion. Seven million people now use high-cost credit. More than 300,000 people borrow from dangerous loan sharks and more are too poor to go bankrupt.

Behind these numbers are broken lives; mental illness, a tragic sense of shame, physical strain, relationship breakdown and poverty flourish thanks to problem debt. Some people are driven to suicide and many more consider it: one in three getting advice have either attempted or contemplated suicide as a result of their debt.

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