FINANCIAL INCLUSION REPORT 2025
FALLING THROUGH THE CRACKS:
THE HIDDEN DANGERS IN THE CREDIT GAP

Click here to download the full report

‍

Our ‘Financial Inclusion Report: the impact of a cost of living credit crunch’ focuses on the impact of the cost of living crisis, personal and household finances, and the resulting impacts on access to financial services in the UK. The findings emphasise how badly some groups – such as young people and ethnic minorities – have been affected more by the crisis than by the pandemic, thereby contributing to the increase in financial exclusion of those looking for support.

‍

Research conducted by Opinium from over 4,500 respondents shows that 44% of people are struggling to ‘make ends meet’ due to the cost of living crisis, all while affordable credit is becoming increasingly harder to obtain. This report demonstrates that the cost of living crisis is exacerbating pre-existing issues and inequalities, and large sections of the UK population are repeatedly being let down and pushed into further difficulties. The number of people who feel they are being locked out of the financial system is increasing year-on-year – up from 1-in-5 (20%) of those surveyed last year, to more than 1-in-4 (28%) this year.

‍

The report shows that those who do have access to credit are finding it difficult to pay off debt or balances, with nearly 3-in-4 (72%) people having struggled at some point to pay off their loans, up from 1-in-2 (50%) in last year’s report, suggesting that financial stability among British consumers is worsening.

Without intervention, there is strong evidence to suggest that the use of unregulated and illegal forms of lending may start to surge as people seek other routes to access credit and keep up with the cost of living.

‍

This year’s report also finds that there is a lack of trust between the public and financial institutions, with only 1-in-5 (21%) credit-holding adults believing that loan and credit card companies are charging fair rates. Nearly 2-in-5 respondents (39%) agreed that if they could access a genuinely low-interest loan, their financial situation would improve; up from 27% last year.

‍

A collective effort from both industry and the regulator is required to ensure a more equitable and accessible financial landscape for the UK population. An industry commitment to greater transparency around interest rates will be an important step in creating a fairer lending environment. Similarly, the adoption of blind credit applications will promote fairer lending decisions, and provide greater access to affordable loans for those with the means to repay one.

‍

Robert Pasco, CEO and Co-founder Plend, comments: “These findings highlight the mass inequality gaps in our society, exacerbated by the pandemic and the current cost of living crisis. Those who are already struggling to make ends meet are hit the hardest, with many being forced to turn to high-cost credit to meet their basic needs. This only perpetuates a cycle of debt and financial exclusion, trapping people in a vicious cycle they can’t escape from, contributing to the ‘Great Credit Divide’.

‍

We must work together to prioritise financial inclusion and create a society where everyone has access to affordable credit, financial stability, and the opportunity to build a better future for themselves and their families.”

‍

This report was created in collaboration with Nationwide Building Society, StepChange, PFRC Bristol University, Green Finance Institute, Ascension and Fair By Design.
Click here to read the full report.

‍

DOWNLOAD REPORT

Millions of people in the UK are being left behind by the financial system.

‍

Our fourth annual Financial Inclusion Report reveals the widening cracks in access to fair, affordable credit, and the hidden risks that are growing as a result. With over 3,000 UK adults surveyed and case studies from Plend's own customer base, this is one of the most comprehensive studies of financial inclusion in the UK today.

‍

Inside the report:

  • Fresh data on who’s being excluded from mainstream credit, and why
  • The emotional and health toll of living without financial access
  • Exclusive insights from  industry experts including StepChange Debt Charity, Fair4All Finance and Clearscore
  • Clear recommendations for policymakers, lenders, and platforms
  • A call to action to rethink how the UK assesses and distributes credit
61% of people in the UK say they’ve struggled to repay their loans at points over the last 12 months
38% of people say their credit score negatively impacts their access to financial services
42% increase in the number of people being declined for a basic bank account from 12% to 17% in one year
11% of the UK population are now actively considering or would consider using a loan shark - a 22% increase since 2022
19% of loan holders do not meet the minimum monthly payments on their loans, rising by 111% from 9% last year.
29% of people feel locked out of the financial system, rising to 50% for low-income individuals

JAMES PURSAILL
CEO & CO-FOUNDER OF PLEND

"Right now, we’re experiencing one of the most challenging socio-economic periods in recent memory. The cost of living continues to rise, inflation has eaten into household budgets, and political uncertainty has left many wondering what support they can rely on. Public services are stretched thin, and too many people are falling through the cracks.”
This year’s report reveals just how deeply the UK’s credit system is failing those who need it most, and the dangerous alternatives people are turning to as a result. With a rise in loan shark consideration, growing mental health impacts, and worsening exclusion among low-income and minority groups, this report is a timely call to action for those who have the ability to change how our system works.

The report provides a framework for what we as an industry can do now to ensure we tackle financial exclusion within the UK in a measured and impactful way, alongside support from regulators such as the Financial Conduct Authority (FCA), the government, and policymakers.

Special thanks to our contributors StepChange Debt Charity, Fair4All Finance and Clearscore for providing their vital sector insight.
DOWNLOAD REPORT