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Certain ethnic groups are less likely to use banks to save their money
01 September 2010
Bangladeshi, Caribbean and Chinese people are less likely to engage with formal or mainstream financial institutions than the white population, often because they lack trust in banks and are reluctant to get into debt.
Informal community savings schemes are becoming a popular alternative for some ethnic groups in the UK, according to Runnymede's latest research report Saving Beyond the High Street
These more traditional forms of saving operate by a group of typically no more than 20 people agreeing to save a small amount of money among themselves, usually involving relatives or members of close-knit communities.
While there is no 'return' on the investment, such savings clubs are proving popular among some of the UK’s minority ethnic communities as they allow them to avoid credit.
However, the report found that these alternative saving decisions are not necessarily taking place due to poor financial understanding, but are rather a judgment that banks are unsafe, insecure or unethical. This perception, according to Runnymede’s research, has become more widespread following the banking crisis.
The full report is available to download for free now: Saving Beyond the High Street
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