Digital and financial exclusion in the UK: what’s driving it and how can we turn the tide?

In this blog, Claire Gordon, Senior Consultant at NPC, shares some reflections on research we’ve conducted for the Santander Foundation exploring digital and financial exclusion in the UK. 

NPC is currently a learning partner for the Santander Foundation’s Digital and Financial Empowerment Fund. To date, the fund has granted £4.8 million to 34 charities across the UK, supporting them to increase skills, confidence, and access to digital and financial services.

What’s driving digital and financial exclusion in the UK today? 

The cost-of-living crisis is changing the nature of both digital and financial exclusion. In May, research by Citizens Advice highlighted how one million people had disconnected their broadband because they could no longer afford it. Such data poverty can drive deeper exclusion, as those without regular online access struggle to keep their skills up to date — the advent of AI is likely to exacerbate this.  Meanwhile, the impact of not having access to the internet is still growing, affecting people’s ability to access basic services, apply for jobs, and get the best deals.

Financial exclusion, or a lack of access to basic financial products or services, continues to be a significant issue. There are 1.2 million adults in the UK without access to a bank account and nearly 9 million people are in serious debt, while the cost-of-living crisis is increasing financial vulnerability. Rising energy prices also mean that debt is increasingly being driven by household bills, rather than use of credit. Incomes simply aren’t enough to cover many people’s basic costs. A poverty premium on many financial services, such as credit or insurance, also means that those with the least are often paying the most.  

What does effective support look like? 

Our research highlighted that there are many interconnected factors driving digital and financial exclusion, which are often reflective of poverty itself—from a lack of secure housing which can make it difficult to access data packages, to zero hours contracts which limit people’s ability to access credit, to a lack of confidence in going online. Being able to deliver holistic support which can be tailored to this range of needs is important in helping overcome barriers. Our work as a learning partner to the Santander Foundation has also highlighted how effective support is often underpinned by trusting relationships and services delivered in trusting spaces—the organisations best placed to provide this will generally be strongly rooted within their communities.  

What else is needed to tackle these issues? 

There are many systemic barriers standing in the way of inclusion. Work needs to be done to improve the accessibility of digital and financial services and change how businesses deal with vulnerable customers. As the online world becomes essential to all aspects of our lives, a right to digital access is increasingly being called for. Developing sources of affordable credit and improving mechanisms to deal with debt are other areas being worked on to address financial exclusion.  

What could this mean for funders? 

Locally delivered support will continue to be needed to help those facing the most significant barriers to exclusion, and charities are well placed to deliver this. Yet funders may have to let go of narrow outcomes in order to deliver the holistic support which is needed. There is also a need to focus funding in places and towards organisations that have historically been under-resourced. 

Individual support alone won’t move the dial. Funders can use their own voice and influence to advocate for wider changes or provide a platform for those working on the frontline to share their insights with those holding the power and purse-strings.  

The Santander Foundation will be using this evidence and insight to shape their approach, helping inform not only what and who they fund, but how they fund—indeed, we heard about the importance of funders working collaboratively, sharing power and learning as they go. Helping bring about lasting change to these complex and interconnected issues will require nothing less.

To read the full report, visit the resource webpage.