HM Treasury and the Financial Conduct Authority (FCA) need to take responsibility for solving the problem of the poorest people being locked out of insurance cover, Fair By Design has urged.
The organisation, which is dedicated to ending the poverty premium, highlighted how Treasury and the FCA regularly passed the buck between themselves and other bodies instead of tackling the issue of people being excluded by price.
Martin Coppack, director of Fair By Design, revealed he had been routinely sent from regulator to Treasury and back again to try and find anyone to take responsibility for the issue.
Speaking at the Financial Inclusion Commission virtual summit this week, Coppack (pictured) explained around 14 million people experience an income shock each year, with 4.5 million people going through two or more income shocks over the same period.
A workshop carried out by Fair By Design and the Poverty Alliance in Scotland saw people elaborate on their barriers to cover.
One person revealed that if they crossed the road where they lived, they lost 16 years of their life expectancy. Another said their insurance cover was so costly, they used their sister’s post code.
Lack of ownership
Coppack added that separate research carried out with the Social Market Foundation indicated people did not need more education as they were fully capable of navigating the insurance market, the problem was cover being too pricey.
Compounding this he said there was a real lack of ownership of poverty and exclusion issues between government and regulator and a lack of a joined-up approach between the pair.
“I cannot emphasise any more how many times over the years I’ve spent going to the Treasury and them saying you can’t prove market failure – go to the FCA,” Coppack said.
“Then I go to the FCA and they say it is social policy, can you go back to the Treasury? Oh no, why don’t you try Competition and Markets Authority?’
“They’ll say go back to the sector regulator, or what about the Human Rights Commission? Oh no, they don’t have the ability or the FCA does. Round and round you go and I’ve been doing this circus for the last 10 years.”
Consequently, Coppack says Fair By Design is calling for the FCA to be given regard for financial inclusion in the government’s Finance Bill.
“It’s kind of crazy when you think about it that the national regulator of financial services in the UK doesn’t even have to consider financial exclusion,” Coppack continued.
“All we’re asking for is the the FCA must have regard to consider the needs of the most vulnerable and excluded so that they’re more able to engage with getting the right data, because industry’s not going to share it, getting the right data, saying how fairly the market is working and then making it plain who should intervene.”