Geographical disparities in Financial Inclusion: Evidence from the United Kingdom

Abstract Recent developments in the UK cost of living crisis underscore the need for financial inclusion – the capacity of individuals to access essential financial services. The extent of inclusion is, to a certain extent, positively impacted by how literate individuals are about financial products and services. Aside from behavioural factors, this paper tests the relationship between inclusion and financial literacy and knowledge across different regions in the United Kingdom using newly developed measures from the Financial Capability Survey, 2018. The results from this paper show there is a positive and nonlinear relationship between literacy/knowledge and financial inclusion, with interesting variations across the country. JEL: G2, I22, R10, R58.