Christmas brings joy, but also financial strain. For many households, December spending on gifts, food, and festivities is followed by the harsh reality of the January blues - when bills arrive, credit repayments bite, and financial stress peaks. This seasonal shock is not new, but it highlights the fragility of household finances across the UK. Without affordable alternatives, families too often turn to high-cost credit, buy-now-pay-later schemes, and loan sharks, deepening cycles of debt.
It is against this backdrop that the recent Financial Inclusion Conference and Labour’s launch of a new Financial Inclusion Strategy took place. Both events underscored the urgency of building a financial system that works for everyone, not just those already well served by mainstream banks.
Learning from the No Interest Loans Scheme
The No Interest Loans Scheme (NILS) has shown what targeted interventions can achieve. By offering small-sum loans to households otherwise reliant on payday lenders or rent-to-own firms, NILS reduced reliance on exploitative credit and improved household stability. Evaluations demonstrated reduced arrears and improved wellbeing, proving that affordable finance can be socially transformative as well as fiscally responsible. Labour’s strategy must now scale such schemes nationally.
Aligning with Co-op Party Policy
The Co-op Party has long championed community-led finance, from credit unions to mutual savings schemes. Its emphasis on democratic ownership and local accountability dovetails with Labour’s financial inclusion agenda. By scaling co-operative models, our government can ensure affordable credit and savings are not just delivered, but trusted and owned by the communities they serve. This is not about charity, it is about empowerment and tackling the affordability crisis households across the country face.
FCA Data and the Scale of the Challenge
Recent FCA Financial Lives data highlights the scale of exclusion. Millions of adults remain financially vulnerable, with one in seven unable to cover an unexpected £100 expense. Rising living costs, wage stagnation and negative real terms pay rises, and insecure work compound this fragility. Without intervention, exclusion will deepen, and reliance on exploitative lenders will grow. The FCA’s forthcoming work on Open Finance and consumer duty enforcement offers a chance to hardwire inclusion into product design, but regulation must be matched by delivery and a renewed energy to deliver innovative and inclusive new financial products.
Two Pilot Campaigns for a Fairer Financial System
Labour’s financial inclusion strategy will only succeed if it is backed by practical delivery. That’s where Mainstream can play a campaigning role; championing pilots that show how inclusion can be embedded into everyday life, while building alliances with credit unions, trade unions, Community Development Finance Institutions (CDFIs), regulators, and lobby groups to create a more inclusive financial services industry that serves people, not profit.
Two simple innovations we can push for focus on tackling financial resilience in rural communities that have become banking deserts, and helping the most vulnerable workers protect themselves from financial shocks. These targeted interventions can then be scaled for wider nationwide delivery.
1. Rural Financial Resilience Pilot
2. Workplace Savings Pilot (Adult Social Care Sector)
Why These Pilots Are Necessary
The necessity of these pilots is underscored by compelling evidence from the FCA Financial Lives data, which highlights that millions of adults remain financially vulnerable, with one in seven unable to cover an unexpected £100 expense. This vulnerability is particularly acute among consumer segments who disproportionately rely on high-cost short-term lending, including low-income households and those facing insecure employment. According to GfK consumer confidence data, these groups exhibit lower confidence in their financial futures, often turning to high cost short term credit options as a last resort.
The post-Christmas financial shock exacerbates this fragility, making affordable lending and savings pathways not just beneficial but essential to breaking cycles of debt and financial exclusion. By embedding these pilots within Labour’s financial inclusion strategy, Co-op Party policy, and broader campaigns for banking hubs and mutual sector growth, Mainstream can leverage strong coalitions across trade unions, credit unions, CDFIs, regulators, and lobby groups. This collaborative approach transforms policy commitments into practical delivery, fostering greater financial resilience and empowering those most in need to regain control over their finances.
Call to Action
Financial exclusion is not inevitable - it is the result of systems that fail to serve everyone. Labour has set out the vision, but it will take campaigning organisations like Mainstream to keep the pressure on. By working with partners across the financial services sector, we can ensure that the financial inclusion strategy delivers real change and is not just another policy paper gathering dust on the shelf.
Now is the moment to act: to campaign for rural lending hubs, workplace savings pilots, and powering up the wider mutual sector to build a fairer finance system for all. Together, we can build a financial system rooted in fairness, resilience, and dignity.
To make a real impact, we urge you to lobby your MPs using our template letter at the bottom of this blog. Your voice can help turn these vital pilots into national policy and ensure that financial inclusion becomes a priority in Parliament.
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Elizabeth Dennis is a former Leader of North Hertfordshire District Council and now works as a consultant, mentor, and advocate shaping policy, technical delivery, and community culture. She specialises in local government finance, data analysis, and public sector management, with a passion for building resilient, inclusive communities.
Her work as a Senior Investigator at the Financial Ombudsman Service and as an Ombudsman with the Ombuds Group has been instrumental in improving consumer protection and resolving financial disputes. This experience deepens her commitment to advocating for fairer financial systems that safeguard vulnerable consumers and promote accountability throughout the financial sector.
Note: All blog posts represent the views of the author alone and not necessarily those of Mainstream.
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Template Letter:
[Recipient's Name] [Recipient's Title]
[Parliamentary Address]
[Date]
Dear [Recipient's Name],
Following the launch of the Government's Financial Inclusion Strategy, which aims to remove barriers and unlock opportunities for people across the UK, it is vital to build on this momentum with targeted initiatives. The Labour Party has also committed to developing a national financial inclusion strategy to address financial exclusion and promote economic stability for all. As a Labour Party member and your constituent, I am writing to you to ask that you devote your energy to delivering a fairer, more inclusive financial services sector, by proposing and supporting the development of two pilot schemes.
A Rural Financial Resilience Integration Pilot targets rural areas integrating affordable lending based on the No Interest Loans Scheme, and financial resilience support into welfare and housing services. By providing mobile advice and lending clinics in community hubs and GP surgeries, and partnering with social landlords to identify tenants at risk of arrears or eviction, this pilot helps reduce reliance on high-cost credit, decrease rent arrears, and improve wellbeing. Supporting this pilot will address financial exclusion in rural areas, promote integrated service delivery, and generate public sector savings by reducing arrears and evictions.
An Auto-Enrolment Workplace Savings Pilot focuses on urban local authority adult social care staff, automatically enrolling employees into a workplace savings scheme with flexible opt-out options. This pilot aims to increase savings participation, improve financial resilience, and enhance employee wellbeing and retention. Given the high proportion of low-to-moderate income workers in adult social care, this initiative is vital for building emergency savings and reducing financial stress.
I attach brief summaries of what these pilots could look like so that you can pursue these with policy partners and colleagues across government. I urge the government to support the delivery of these pilots to strengthen financial security for vulnerable populations, improve public sector efficiency, and foster sustainable economic wellbeing.
Your leadership on this issue will make a significant difference. I would be happy to provide any additional information or meet to discuss this further.
Thank you for your attention to this important matter.
Sincerely,
[Your Name]
[Your Organisation]
[Contact Information]
