The FCA's Financial Inclusion Remit: Why the Words Matter.

Published: 2024  |  Perspective updated: 2025

In November 2024, the Chancellor of the Exchequer wrote to the Financial Conduct Authority with a set of recommendations about aspects of economic policy the regulator should have regard to. Among them was a specific recommendation to reinforce financial inclusion — to focus on enabling individuals to access the financial services and products they need to fully participate in the economy.

For anyone who has spent years working on financial inclusion inside financial services, this was a meaningful moment. Not a solution in itself — a recommendation is not a rule, and “have regard to” is not “must deliver” — but a signal that the language and the intent are moving in the right direction.

I want to explain why the specific use of the words “financial inclusion” matters, and why the distinction between inclusion, vulnerability, wellness, and education is not pedantic but practically important.

Why the distinction matters

For years I have drawn Venn diagrams in meetings — mapping the overlapping but distinct territories of financial vulnerability, financial wellness, financial education, and financial inclusion. They are related. They are not the same.

Financial vulnerability refers to people in circumstances that make them susceptible to financial harm — illness, bereavement, job loss, domestic abuse. It is a condition that can be temporary or permanent, and it cuts across income levels. The FCA's consumer vulnerability guidance is specifically oriented around this.

Financial wellness is about an individual's overall relationship with money — whether they feel in control, whether they have a safety net, whether they are making progress toward their goals. It is a state of being that financial services can support or undermine.

Financial education is about knowledge and skills — whether people understand how pensions work, what a credit score is, how to compare financial products. It is a necessary but not sufficient condition for financial participation.

Financial inclusion is different again. It is about whether people can access the financial system at all — whether they have a bank account, can get credit at a fair rate, can access insurance, can participate in the pension system. It is a structural question about design and access, not just about individual circumstances or knowledge.

The FCA's new financial inclusion remit effectively asks Consumer Duty to go beyond preventing harm and to actively minimise financial exclusion — a meaningful shift in the framing of what the regulator expects from financial services firms.

What good financial inclusion policy looks like

The distinction matters because the interventions are different.

If you diagnose the problem as financial education, you build financial literacy programmes. If you diagnose it as vulnerability, you build enhanced support processes and specialist teams. If you diagnose it as wellness, you build tools that help people track and manage their finances. All of these are valuable. None of them is sufficient if the underlying products and services are not designed to be accessible to people on low incomes, people with complex lives, people who do not fit the standard customer profile that most financial services organisations have historically been built around.

Financial inclusion requires product design, pricing, distribution, and communication that genuinely works for the full range of people who need financial services — not just the ones who are easiest to serve. The FCA has committed to working with the government to progress the Financial Inclusion Strategy — a strategy the government announced plans to develop in 2024, representing a potentially significant shift in the policy frame.

The sustainable finance connection

The Chancellor's recommendations also included attention to sustainable finance and unlocking the potential of the green transition. My view — consistent with everything I have worked on in this space — is that the key to getting this right is the same as for financial inclusion: putting customers at the heart of solution design and communication.

Sustainable investment products that are designed for the already-financially-engaged will not drive the kind of broad-based participation that the transition requires. The customers who most need to understand the relationship between their money and the planet are often the same customers who feel furthest from the financial system. Designing sustainable finance for accessibility is not just good ethics. It is good strategy.

A step, not a destination

I want to be clear that a recommendation to “have regard to” financial inclusion is a step in the right direction, not a destination. The hard work of embedding this into how firms design products, price services, and measure outcomes is what follows. The FCA interpreting these recommendations seriously, and firms responding in good faith rather than with compliance minimalism, is what will determine whether this changes anything in practice.

But the language matters. The use of “financial inclusion” specifically — rather than the softer or more diffuse framings that have sometimes substituted for it — signals a clearer intent. And for those of us who have spent years arguing that a financial system designed for all is both possible and necessary, it is a welcome signal to have on the record.