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Financial Inclusion

Having the skills to manage your money well and having access to appropriate financial products and services plays an integral part in tackling poverty in Scotland and is a key component in securing sustainable employment. Alongside income maximisation, debt advice and access to affordable credit the ability to budget and manage your money well plays an important role in determining life chances.

According to Citizen's Advice Scotland one in ten Scots do not have a bank account. This figure rises to one in five in the 15% most deprived areas in Scotland. People may be unable to borrow at a fair rate, save for necessities or make provision for their future. In addition they may face significant disadvantages such as being unable to start a job or set up home as bank accounts can be prerequisites for the process. All of this puts barriers in the way to finding routes out of poverty.

Even when people are able to move into employment they may receive financial shocks as debt which was previously dormant when unemployed may be reactivated with some companies aggressively pursuing repayments. Access to good quality, impartial debt advice and affordable credit can be a life line in these situations offering individuals the opportunity to take control of their finances and pay back what they owe in a manageable way with affordable rates of interest.

Employers and employability services should be aware of the impact that moving in and out of work can have financially. Offering the skills to be financially capable and manage money well can be built into a range of services. This section looks at some of the ways in which providers can integrate financial awareness and support into an employability setting, and why this may help individuals to gain and sustain employment and hopefully stay above the poverty line.

Research has found that money and debt problems can:
  • Distract people from jobseeking
  • Constrain job search activity
  • Create disincentives to work
  • Provide barriers to employment, eg not having a bank account
  • Affect the chances of employment being sustained