Low-income families face particular obstacles in accessing and using financial services and this may prevent them from engaging fully in normal social and economic activities, a study has found.

"The application of ID requirements for opening a bank account, restrictive criteria for some free bank accounts, a lack of appropriate financial products and the limited availability of financial services from community and State bodies are just some of the barriers that people encounter," said Helen Johnston, director, Combat Poverty Agency, which conducted the study on financial exclusion. It followed an approach from the Irish Financial Services Regulatory Authority.

People on low incomes may also exclude themselves from the banking system, the report found. "In some cases, this is because they lack the confidence to engage with banks or feel that banks are not interested in poor people. In others, it is because they feel that a bank account is unnecessary for managing a low income," said Ms Johnston.

Improved access to financial services could help people on low incomes to avoid poverty by managing their money more effectively, accumulating savings and accessing affordable credit, according to the agency.

"Without such facilities, the cost of managing household resources is higher and more difficult; people are more vulnerable to theft and have little protection against unexpected expenditure or loss of income. They also face greater difficulties in securing employment, given that many employers require employee bank account details to process payrolls and are more likely to turn to money lenders to access credit in emergencies," said Ms Johnston.

The report highlights the important role of credit unions and post offices in providing access to savings and affordable credit facilities in disadvantaged communities. It recommends that their services be expanded to include a wider range of facilities like "no frills" bank accounts.

The Irish Banking Federation said there was an increasing range of competitively-priced consumer products and services. "The fact that nine out of 10 respondents in this research report have a bank account is testament to the manner in which the banking system currently caters for consumers' needs," it stated.