Today’s Budget represents the opportunity for the Government to ease the burden of the cost of living crisis on households across the country. The Joseph Rowntree Foundation (JRF) recently found 1 in 5 people were in poverty in Britain, with 6 million people being in ‘very deep poverty’. It’s clear indication urgent action is needed from the Government to reduce poverty in the Budget, helping people to make ends meet.

Improving financial inclusion would be a significant action in alleviating and reducing poverty levels. Millions across the country lack access to vital basic financial services – leaving them financially perilous. Without access to bank accounts, loans and insurance, people are unable to build the financial stability they need to get by and improve their living standards. This is particularly the case for those in ‘very deep poverty’ as described by the JRF. In 2023, over 1 million people did not have a bank account – with the majority being in the lowest income decile. This situation often leaves people at the mercy of loan sharks or doorstep lenders.

Mutual and co-operative financial services, such as building societies and credit unions, are often a lifeline for those struggling financially. As member owned and operated organisations, they always work in the interests of their membership – providing bank accounts, loans, mortgages and more. The member owned co-operative model at the heart of credit unions and building societies means they are more financially inclusive than commercial banks, providing loans at reasonable interest rates which enable people to invest in their future. They have a track record of being less risky, more stable and better placed to recover from economic shocks than commercial banks, as demonstrated in the Global Financial Crisis.

Labour has recently committed to doubling the size of the mutual and co-operative financial services sector in its Financial Services Review. This commitment from Labour is a clear recognition of the vital role building societies and credit unions play in enabling economic growth, establishing financial inclusion and creating the building blocks for people to save and invest for a better future.

Today provides the opportunity for the Government to match Labour’s ambition and take action on financial inclusion and rising poverty. The question is, will they take it?