As you can imagine financial services play a very large part in the majority of people’s lives, this being the majority of people rely on bank accounts to pay bills, receive income, salaries and so forth. However, a minority of people do lack access to the most basic financial products and services, incurring significant costs as a result…financially and from a health perspective.
The term ‘financial exclusion’ is used in different ways, although it is most often referred to as a lack of access to a range of financial services. Many people can be affected by financial exclusion, and from this is can be difficult to prise yourself free. Generations of families are seen operating in cash in hand, saving at home, or borrowing from high street high interest lenders. Some families are excluded because of a disability, criminal background, or a lack of financial capability to acquire services. This exclusion is driven by poverty, making living on a low income even more difficult. Generally life becomes more expensive, everyday living is costly, more unstable, poorer choices are made and eventually more stressful, to say the least.
The exclusion of financial services very much hurts individuals, and families, it burdens society and disrupts lives into downward spiral. Financial exclusion acts as a boundary or a barrier not just for personal development but for progression for the whole family economically. This way of living can also be detrimental to generations of families, as they learn behaviour, have poorer choices to make and less opportunities to develop. These issues, very often lead to mental health issues, family breakdown or even homelessness.
From a very early age research shows that having more money directly improves the development and level of achievement of children. Cognitive development and school achievement were most improved by having more money. However, in contrast to this, reductions in family income are likely to have wide-ranging negative effects, including health.
Research is plentiful in suggesting that children in lower income households do less well than their peers on many levels, however, not just with their education but with their physical and mental health also.
Children brought up within low household incomes are more susceptible to experiencing health problems and develop health risks as they grow. This includes accessing healthcare, paying for health insurance, opportunities to access support, paying for medicines and treatment and so forth. Interestingly the relationship between financial exclusion and ill health is a two way street, financial exclusion contributes to ill health and lack of opportunities, and further ill health can contribute to financial exclusion.
Ill health can have negative consequences for an individual’s financial circumstances as any other life event, such as redundancy, loss of job, an inability to work, long term ill health or the death of a family member. Households and families already on low incomes can be hit the hardest as there is very often little or no money to fall back on to support this gap of income. In regards to long term unemployment due to ill health, limiting ability to work or not fit to work it can be very easy to slip into poverty, and in turn, financial exclusion.
Families managing and trying to operate on a low income also has a negative effect on maternal health and health related behaviours. People with low incomes often reside in similar areas, resulting in a lack of opportunity for many families in one particular area. This can often lead to poor learnt behaviour, poor decision making and poor sharing of information and support. Infant mortality within these environments is higher throughout children born into poverty, who are more likely to be born early and have low birth weight. After birth, poverty and financial exclusion can also be directly linked to postnatal depression. Children from low-income households and lack of financial services are more likely to experience problems with nutrition, which can have a negative influence on their mental well-being and over the longer term can lead to childhood obesity.
Families living with the consequences of financial exclusion can be seen to directly relate to health, employment, behaviour, finance, relationships and individual well-being.
Low-income families with poor access to financial services are more likely to live in poor housing and children have fewer safe places to play, leading on to poorer housing being associated with a range of childhood health problems, and ultimately in turn this affect can lead to mental ill health. The larger ongoing picture is that people growing up in the poorest households, excluded from financial services and opportunities of support are more likely to suffer poor physical and mental health in adulthood. A result of which, financially excluded people can be at an increased risk of severe, long-term and life-limiting illnesses.