Making ends meet: the cost and implications of money management for low-income consumers

Document type
Burton, Marie
Consumer Focus
Date of publication
1 September 2011
Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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This report brings together Consumer Focus research findings on low-income consumer experiences of using a range of financial management products and services. It considers: low-income consumer priorities; costs and consequences of using the services and products available to meet these priorities; and the implications for tackling the poverty premium. A consistent feature of the research findings is that low-income consumers’ choices are based on an active weighing up of the costs and benefits of the products they consider available to them. Often this means having to make difficult trade-offs between cost and other priorities, given the limited choices on offer. Mainstream financial services providers have shown they are not interested in lending to low-income consumers, whom they see as high-risk and low-profit. This means high-cost providers are stepping into the gap at the expense of low-income consumers’ limited budgets. The report outlines three key steps to meet the challenge of tackling the poverty premium: building industry commitment to ending the poverty premium; developing a framework for creating affordable financial products and services which meet the needs and priorities of low-income consumers; and further research to support the development of measures to tackle the poverty premium.

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