Financial exclusion is a significant problem in the UK being placed under increasing scrutiny by the rollout of Universal Credit. We talk to GovTech startup and GovStart member Pockit about their banking services aimed to help the traditionally underbanked into financial inclusion.
What is Pockit?
Pockit is building the world’s most inclusive bank. We are committed to helping the people that have been left behind by mainstream banks and help them take control of their financial lives. Right now our service has 200,000 users in the UK, and we now offer all of the services of a traditional UK current account.
How large is the problem of financial exclusion? And why is it such an important issue to tackle?
Financial exclusion is a significant problem in the UK. 1.5 million adults do not have a bank account, and often struggle to access jobs or other services as a result. 2.5 million adults with bank accounts spend more than 75% of the time in overdrafts, and end up paying very high levels of bank fees and interest. A total of 8 million people are unable to access mainstream credit and turn instead to offline, opaque and punitive alternatives. These factors entrench further problems, like lack of access to reasonably priced energy tariffs, which impose a poverty premium of £500-1000 per household per year on the poorest in society.
How is a Pockit current account set up to help the traditionally underbanked?
At Pockit, we are committed to offering banking services to individuals as a first step towards gaining control of their financial lives and accessing more services to help save them money as a result. A Pockit account offers all the services of a traditional current account, but it is easily accessible to all – anyone can open a Pockit account online in just two minutes – and charges are completely transparent. We only charge fees where necessary, we label them clearly, and everything is either free or 99p. In addition, we provide telephone support and the ability to deposit money at 28,000 real-world locations in the UK.
“Pockit accounts can help address one of the major challenges for citizens moving onto Universal Credit.”
We are also excited to be developing additional features, including jam jar accounts to help build budgeting skills, and a credit builder tool to help people improve their credit score.
Universal Credit is an important issue at the moment. How could Pockit cards help both citizens and authorities in rolling out the new system?
Pockit accounts can help address one of the major challenges for citizens moving onto Universal Credit. By combining six benefit payments into one monthly payment to claimants, Universal Credit mirrors the way in which monthly salaries are paid. This requires a greater level of budgeting on the part of claimants, particularly as housing benefit is being paid directly to claimants, rather than to landlords. Unfortunately, the levels of rent arrears and indebtedness have risen for many Universal Credit claimants.
Pockit accounts help citizens track their finances, and easily make and track their payments. Universal Credit payments can be paid into Pockit accounts (they have account numbers and sort codes), and citizens can use their accounts to more easily budget their spending. We are currently developing further features to help users to budget and plan, including jam jar accounts.
What is the future for Pockit? And how do you see the government’s provision of financial support developing over the next 5 to 10 years time?
We have reached an exciting stage. Our 200,000 users have found our account to be a valuable alternative to the high street banks. Over the next few years, we will continue to launch new services, like the credit builder, to help people take greater control of their financial lives, and we hope to make a positive difference to the lives of many more customers.
I hope that the next few years will see a continued focus on the problem of financial exclusion and the barriers this imposes on many aspects of life. I hope that Pockit will play a role by helping Government to offer greater access to the financial mainstream alongside the provision of other services and benefits.
To find out more about Pockit and the services they offer, visit the Pockit website.
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