Wednesday, 7 September 2011

Financial exclusion, financial literacy and making cents

The banking crisis has dominated our headlines during the past three years. But bank guarantees, recapitalisation, NAMA and debt write-downs don’t mean much to those suffering financial exclusion – those who, for a range of reasons, cannot access the banking services many of us take for granted. The European Commission has estimated that 17 per cent of Irish people live in households with no access to a basic bank account. Ireland’s level of financial exclusion is high relative to other EU countries.

Last year, TASC published Life and Debt 2010 – Financial Exclusion in the Age of NAMA, which included a list of recommendations. More recently, the ESRI published a study on Financial Exclusion and Over-Indebtedness in Irish Households, and the Government published its own Strategy for Financial Inclusion Final Report, which noted that “The low level of financial literacy of most financially excluded people can translate into high margins for providers of financial services, so it is critically important to give people the tools to make wise financial choices, and to protect themselves from predatory lenders/insurance providers".

Promoting financial literacy is thus crucial to combating financial exclusion. Research findings published today by the National Adult Literacy Agency and the EBS show that two-thirds of Irish people struggle to understand financial terms. With that in mind, NALA and the EBS have re-vamped their financial information website, a free resource aimed at anyone who wants to understand different areas of finance.

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