Why reducing the poverty gap needs collaborative effort
July 4th, 2017 / Innovate Finance / News
Virraj Jatania, CEO and Founder of Pockit
Over the last year, a soundbite we’ve become used to hearing is that ‘the UK is divided’. Leave and remain. North and south. Young and old.
And now a new study by the Social Mobility Commission, an independent body that monitors progress on social mobility, has found that successive governments have failed to significantly reduce the divisions between the “haves and have nots” in Britain over the past 20 years.
The report found that 30% of children in the UK currently live in poverty. It estimates it will take 120 years before disadvantaged teenagers are as likely as their wealthier counterparts to get equivalent qualifications.
In a statement, the commission urged government to take further action, saying “without deep-seated reform, social and economic divisions in British society are set to widen”.
But should the responsibility for reducing poverty in the UK be left solely with government? Can more be done by the private sector to enable low income families to become more socially mobile?
One of the most pervasive, yet least known, obstacles faced by the poorest people in society is financial exclusion.
Around 2 million people in Britain today are living without a bank account, for reasons a simple as being unable to provide (or afford) verification documents such as passports. 4 million more use their accounts infrequently, usually due to a traumatic change in personal or financial circumstances.
There’s an acute need for such people to be able to access basic banking features. According to one estimate, families without bank accounts (who are unable to transact online and access direct debits) end up paying on average an extra £1,300 a year.
Fortunately, technological advances have enabled companies such as Pockit to begin tackling this issue, empowering people from poor backgrounds to become more socially mobile. We’re proud to be able to offer everyone, regardless of personal circumstances, a way to manage money and begin planning for the future.
Working towards a social end can be both inspiring and enlightening in equal measure. Every day we see examples of aspiration, persistence and ingenuity amongst our customers, half of whom earn less than £20,000 a year. It’s self-evident to us that the same mentality can exist in a young person forced to live on benefits as that of a high flying young executive.
I believe the onus is on every sector – public, private and third – to make opportunities available to give everyone a fair shot.
Only with greater collaboration can we begin to make substantive inroads on what is surely the most long standing societal division of all.
Virraj Jatania, CEO and Founder of Pockit. Last week, Pockit joined Public’s GovStart to help unlock the ability startups have to solve public problems.