Tom Lake, Director of Policy and Strategy at Fair4All Finance

Fortnightly financial 5 minutes #12 Tom Lake

Nigel Yeates, Communications and Stakeholder Business Partner, speaks to Tom Lake, Director of Policy and Strategy at Fair4All Finance, about access to financial services and how to best serve customers in vulnerable circumstances.

Please tell us about the mission and strategy of Fair4All Finance as an organisation and your role at the organisation

We want to make sure that people in vulnerable circumstances have access to fair and affordable financial products and services.

We do this by investing in organisations that are already doing a good job of helping people in these circumstances and working with the financial services sector to create new products and services to meet gaps in the market. Additionally, our research programme gathers evidence to support the policy and regulations that help those in vulnerable circumstances.

Our ultimate goal is to create an accessible financial system that helps everyone who needs it.

As Director of Policy and Strategy, I lead our Systems Change and Impact team. Our focus is on building and sharing evidence of best practice in financial inclusion and advocating for policy and/or regulatory change, to support a scaled market that meets the needs of customers in vulnerable circumstances.

We also make the social and economic case for continued investment in financial inclusion, for example through our recent call for more dormant assets funding to address the issue.

You talk about financial exclusion and also consumers in financially vulnerable circumstances, could you explain these further?

Many people don't have access to the same financial services and products as others, which makes it difficult for them to manage their money. Without access to safety nets like credit, insurance or savings everyday events or financial shocks can make life harder.

This can lead to people having to turn to expensive credit or illegal moneylenders, which can harm people's mental and physical health and cause long-term debt.

We know anyone can find themselves in this situation. Circumstances such as ill health, unstable incomes and a lack of savings can all cause financial vulnerability. Life events like losing a job, separation or bereavement can put a strain on finances and affect well-being.

Today there are at least 17.5m people in the UK who are in financially vulnerable circumstances. This encompasses people with very low incomes, many of whom have been experiencing a cost-of-living crisis for years, through to those who, in spite of earning what appears to be a healthy household income, find it hard to access the products they need or are struggling to repay debt.

You recently launched a campaign to raise awareness around community finance lenders, why is this so important at this time?

One of our key priorities at Fair4All Finance is to increase access to affordable credit. An important part of this is investing in the community finance sector to grow the supply of affordable credit, improve access to it and help providers develop new products and services.

Another piece of the puzzle is making sure people know who these providers are, as the community finance sector has been described as one of the UK’s most well-kept financial secrets.

While credit isn’t always the right answer for everyone in financially vulnerable circumstances, we know access to a small, short-term loan can help people smooth incomes, meet unexpected costs and start to build their financial resilience.

Responsible lenders like credit unions and community development finance institutions (CDFIs) get this too and can be a lifeline, especially in times of crisis.

However, many people still don’t know what they do and how they can help people increase their financial resilience through saving and accessing wider financial support like budgeting tools or benefits calculators (research shows that a staggering £15bn of benefits go unclaimed each year, meaning many people are missing out on hundreds or even thousands of pounds of income).

As more people are squeezed and seeking alternative finance options in response to the cost-of-living crisis, it’s more important than ever that they know community finance providers could be an option to help them.

What other market gaps and key campaigns are you working on?

We’re piloting a no-interest loan scheme (NILS) with funding from HM Treasury, JPMorgan Chase and the devolved administrations.

Early indications show NILS loans are providing a vital financial cushion for people unable to access or afford existing forms of credit.

Offering a way to spread essential or emergency costs can provide a stepping stone to financial resilience for people in vulnerable circumstances. Like a single parent who is able to cover upfront nursery fees so they can return to work or afford a car so they can travel to a better-paid job.

We’re also working on a consolidation loans pilot with credit unions to help people with the rising costs of living.

A consolidation loan at the right time can prevent people who are still paying off their credit debts from falling into financial hardship. By refinancing their credit debts onto lower interest terms with lower monthly payments, people’s financial resilience can be improved. This will also reduce the need for formal debt solutions and the consequences that can bring.

Beyond these, which things are top of your organisation's to-do list for the rest of 2023?

Since our founding in 2019, we’ve learned a lot about what does and doesn’t work when serving customers in vulnerable circumstances well. We’ve achieved a lot in a short space of time, and we know there’s so much more we can do if we can successfully work with the financial services industry to drive change at scale.

A large part of our work is to prove how different delivery models can meet the needs of customers. Whilst, for example, our current NILS scheme is at a pilot level of scale, eventually we need the financial services industry to work with us to help scale this and other models which we know can help people. This will be a key focus in 2023 – bringing more people into solving this important challenge with us.

We are interested to see the changes that the new Consumer Duty will catalyse this year. It’s an important shift in the industry and one which we supported. We’ll be looking out for the way it may strengthen the provision of the right financial products and services to the customers who most need access.

On the back of our Affordable Credit Scale Up Programme and our awareness-raising campaign, our work with the community finance sector also remains a priority. We have an ongoing set of programmes to work with existing lenders to help them to scale their offerings.

Collaboration will be a theme through all our work. In the spring we will publish a Financial Inclusion Plan, which will set out all the activities which we think will be required to address financial exclusion and how lots of organisations may work together on this.

Please look out for this, you can reach out to us at to receive the report and to let us know if you would like to work with us on any of our programmes.

Thanks very much Tom for all those insights and we wish you all the best with that 2023 to-do list.

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