FCA speaks on financial capability

Nikhil Rathi has spoken on the importance not only of ensuring vulnerable consumers have access to help but also that we improve knowledge. He noted that around two-thirds of renters, for example, do not have contents insurance, and are therefore putting themselves at risk of significant loss, while less than 15% of consumers have a practice of always paying off highest interest balances first. A significant number of adults say they would not be confident they could spot a scam.

So the FCA’s call is to connect inclusion with capability, but that is not its role. It recognises that if it regulates in too granular a fashion this may stifle innovation – and it’s aware that its new approach may result in a worse outcome for some consumers, for instances with the new targeted support regime, and the loosening of mortgage lending restrictions.

The FCA is urging the Government to implement its Financial Inclusion Strategy and for the industry to build on what already works.