Scotland Risks Being Left Behind in Financial Inclusion Fight, Warns National Body
11 Mar 2025
- Financial Inclusion for Scotland
- Impact
- Cost of Living
Financial Inclusion for Scotland makes strides in first year of strategy but calls for help from additional £74M in dormant assets funding.
Financial Inclusion for Scotland (FIFS) has warned that Scotland risks being left behind by the rest of the UK in the fight to tackle financial exclusion among its most vulnerable communities and individuals.
The warning from FIFS comes after the UK Government recently reconfirmed its decision to allocate an extra £87.5m in dormant assets funding to financial inclusion in England and Wales over the next four years, through Fair4All Finance.
At present, funding from the Dormant Assets Scheme in Scotland is used to fund youth projects. The recent expansion of the scheme to include other financial sectors including pensions and insurance will deliver an additional £74 million for Scotland¹, presenting an opportunity to direct a proportion of these assets towards financial inclusion initiatives, without impacting existing funding commitments. A key pillar in FIFS’ inaugural Financial Inclusion Strategy, published in May 2024, is the establishment of a £20 million Investment Fund which would be instrumental in bolstering community lenders and expanding the availability of affordable credit.
Stephen Pearson, Chair of Financial Inclusion for Scotland said:
"People in Scotland are facing unique financial inclusion challenges that require targeted solutions. The disparity in dormant assets funding between Scotland and the rest of the UK threatens to create a two-tier system of financial inclusion, leaving Scotland behind. We must act now to seize the opportunity presented by the expanded Dormant Assets Scheme to ensure Scotland's most vulnerable communities aren't left behind. Our proposed £20 million Investment Fund could be transformative in expanding affordable credit access through community lenders, but we need the funds to make this happen."
FIFS is delivering a progress report on its Financial Inclusion Strategy later today (11th March) at a Scottish Parliament reception, to be attended by around 80 stakeholders from across public, political and civic life.
Since launching its ambitious strategy, FIFS has established itself as a leading voice for financial inclusion. The organisation has made substantial progress in advancing financial inclusion across Scotland through policy engagement, political advocacy, and other initiatives.
Activities include the development of a Scotland-specific Financial Inclusion Dashboard, leveraging regional and local data to better understand financial exclusion and direct interventions effectively and a School Banking Pilot Project, enhancing banking inclusion and improving access to bank accounts for young people.
FIFS has actively shaped national policy through contributions to the FCA Strategy 2025 and the Financial Inclusion Commission's UK Strategy, ensuring Scotland's unique needs as a devolved nation are represented. The organisation has also strengthened its political influence, securing high-level engagements including a meeting with the First Minister and support from the Cabinet Secretary for Education for a pioneering financial education project.
FIFS continues to build a strong evidence base for policy-making through partnerships with the FCA Financial Lives Survey and Fair4All Finance's Persona Project, while its participation in the FCA Financial Inclusion Techsprint has fostered valuable connections between technology providers, banks, and community finance organisations.
“Financial Inclusion for Scotland has taken some significant strides forward over the past year in helping to advance the case for financial inclusion in Scotland. Our collaborative approach with key stakeholders, including the FCA, Scottish Government and HM Treasury, is helping to address systemic barriers to financial inclusion. As well as influencing and shaping policy, we’re particularly excited about our innovative projects, including a Scotland-specific Financial Inclusion Dashboard and our School Banking Pilot Project, which are creating practical solutions to improve financial access. As we move into the second year of our strategy, we’ll be looking to accelerate the level of practical support, so we can start seeing a positive difference to the lives of those most affected by financial exclusion."
Stephen Pearson
Chair of Financial Inclusion for Scotland