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'Huge Step' Made In Financial Inclusion

Aug 18, 2007
Earlier this week, the Treasury announced that the implementation of hundreds of non-fee charging automated teller machines (ATM) throughout Britain is set to benefit more than one million people - in particular those on low incomes. The scheme, which will see some 600 fee-free ATMs installed, could well help some of the most financially vulnerable people across the country to manage their finances and handle their debts better.

Economic secretary to the Treasury Ed Balls suggested that such a move could be a vital step in improving consumers' financial education towards areas such as Personal loans, mortgages and savings. He said: "These new free cash machines will help individuals on low incomes to access financial services as easily and cheaply as possible." "Opening bank accounts and having access to financial information and products enables people to manage their finances better," Mr Balls continued.

John McFall, chairman of the Treasury Select Committee and chair of the ATM Working Group, added: "This is a huge step forward in our campaign for financial inclusion." Sue Edwards, senior policy officer for Citizens Advice, said: "This is good news and shows that real progress is being made to give vulnerable people on low incomes greater access to free cash machines."

Ms Edwards added that the government needs to "keep up the momentum and ensure that the poorest areas in the country are prioritised". The officer also claimed that fee-charging ATMs have a "disproportionate impact" on financially vulnerable groups such as the elderly or families on low incomes, which in turn may impact upon their attempts at debt management and making repayments on personal loans, credit cards, overdrafts and other types of borrowing.

Meanwhile, Ms Edwards also pointed to a Citizens Advice report published last year indicating that 40 per cent of cash machines charge for withdrawals. Although nearly all of consumers (99 per cent) surveyed claimed to be aware of fee-charging ATMs, about half of respondents claimed to have been made unaware that they were about to incur extra costs when using such a machine.

Angela Knight, chief executive of the British Bankers' Association (BBA), also lent her support for the ATM plans and added that the government is beginning to recognise the contribution banks are making towards promoting financial inclusion for as many members of society as possible. She said: "Banks have driven a campaign to put machines into some of the UK's poorest areas which means people on low incomes will have the same free access to cash as those in more affluent places."

And despite many Britons still being susceptible to fee-charging ATMs, Ms Knight indicated that consumers in this country could actually be better off than many other people around the globe. Pointing to independent research carried out by Oxera, the BBA chief executive claimed that half of ATMs in Britain are free - with other countries said to carry a greater proportion of fee charging machines. As a result, the provision of free cash machines may be able to help consumers plan their finances, something a recent study has indicated they are not doing at the moment.

According to findings by National Savings & Investments, a third of consumers are "financial fantasists" and are counting on earning more money in the future or borrowing through personal loans or credit cards instead of making a detailed plan for later life.

So for those looking to make the provision of free cash machines the starting point to managing their finances why not opt for a competitively-priced personal loan?
About the Author
Abbi Rouse writes for Essentially Home Loans where visitors can apply for personal loans and also focuses on secured loans for UK residents. Visit Today: http://www.essentiallyhomeloans.co.uk
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