Banking and Financial Exclusion Among Disabled Adults
Author: Ian C. Langtree - Writer/Editor for Disabled World (DW)
Published: 6 Sep 2016 - Updated: 2 Sep 2026
Publication Type: Informative
Table of Contents:
Synopsis - Definition - Overview - FAQs - Insights, Updates - Related Content
Synopsis
This research from Columbia University's Mailman School of Public Health examines a critical yet often overlooked form of material hardship facing low-income households. Published in Social Science and Medicine, the study draws its authority from in-depth interviews with 72 families in the Boston area who were struggling with housing and financial difficulties. The findings matter because they quantify a brutal reality: utility bills consuming nearly 30 percent of monthly income force families into impossible choices between paying for heat and meeting other basic needs. People with disabilities and seniors on fixed incomes face particular vulnerability to this cycle, as limited mobility or health conditions make energy needs non-negotiable while simultaneously restricting employment options. The research documents three interconnected dimensions of energy insecurity - economic strain, physical infrastructure deficiencies, and behavioral coping strategies - offering evidence that can inform policy interventions and assistance programs.
At a Glance
- 1 - Almost half of disabled households have no credit at all. They are twice as likely to lack credit as households without a disability.
- 2 - Only 40 percent of disabled households save for unexpected expenses, versus 61 percent of other households. Savings are often kept at home or with family rather than in an account.
- 3 - The National Disability Institute unveiled the findings at a press conference at the National Press Club in Washington, D.C. Executive Director Michael Morris and co-author Nanette Goodman presented the highlights.
- 4 - Two panels reviewed the report, one made up of federal agency representatives and one of individuals with disabilities. Speakers came from the FDIC, the IRS, the Department of Labor, Columbia University, and the National Association of the Deaf.
Topic Definition
- Financial Exclusion
Financial exclusion describes what happens when individuals or households cannot reach or make full use of the mainstream financial products and services most people take for granted, such as bank accounts, affordable credit, savings tools, and secure online banking. For adults with disabilities, it rarely comes down to a single cause. Instead it builds from a stack of overlapping barriers - limited income, no credit history, patchy internet or smartphone access, and financial systems that were never designed with disabled customers in mind. The result is that many turn to costlier alternative services like check cashing or payday lending, keep their savings at home instead of in a bank, or go without credit entirely. Left unaddressed, that exclusion tends to feed on itself, making it harder to weather emergencies, build assets, or reach the economic self-sufficiency that laws like the Americans with Disabilities Act were meant to support.
Overview
Disabled Adults Face Banking and Financial Exclusion
A researcher at Columbia University's Mailman School of Public Health studied a hidden source of hardship: energy insecurity, the inability to adequately meet basic household energy needs, and its adverse environmental, health, and social consequences.
The study provides real-world examples of three dimensions of energy insecurity: economic, physical, and behavioral. This study is one of the first to examine how household utilities, which account for a large share of living expenses, are a critical measurement of material hardship. Findings are published online in Social Science and Medicine.
"Utilities bills at $200 per month represent nearly 30 percent of household income for those at or near the federal poverty level making it a significant, and likely unaffordable, expense," said lead author Diana Hernández, PhD, assistant professor of Sociomedical Sciences at the Mailman School of Public Health.
"While participants often expressed an ethos of responsibly 'paying the bills,' many simply cannot afford the monthly utility payments and were often 'playing catch up' in a vicious economic cycle of prioritization and trade-offs, complicating the already fragile financial profiles of low-income ratepayers."
Dr. Hernández conducted in-depth interviews with 72 low-income families from community health centers in the Boston area. Participants included those reporting at least one housing hardship, ranging from housing affordability, to frequent moves, to hazardous housing conditions and income at or below $32,000, which equals 150 percent of the 2008 federal poverty level.
Heads of household ranged in age from 18 to 59, were mostly single mothers (97 percent), racial/ethnic minorities (47 percent African American; 29 percent Latino), with a high school education or higher (85 percent).
The majority received housing subsidies (65 percent). Participants reported a wide range of household energy expenditures per month, reaching as high as $650 at the height of the heating season.
"Energy insecurity is a term little understood," said lead author Dr. Hernández, "In this analysis, participants described energy as a main source of hardship. Collectively the data conveyed a tale of economic adversity, inefficient building infrastructure, complex coping strategies, and limited options for assistance."
Mental and Social Fallout
The experience of energy insecurity triggered mental health disorders such as anxiety and depression. The constant threat of service interruptions due to non-payment fueled parental fear and stigma.
Parents felt judged by persistent surveillance on the part of child protective services and feared losing parenting privileges. Moving represented a way out of the discomfort for some participants who expressed feelings of shame and a disruption of family life when living through a utility service disconnection.
"However, this coping strategy brings with it negative consequences, as residential instability spurs the loss of social network and institutional ties, which comes at a significant cost in terms of social capital," observed Dr. Hernández.
Inefficient Infrastructure Exacerbates Economic Burden
The challenge in simply trying to pay the bills is further exacerbated from inefficiencies in their physical homes, reflecting the second dimension of energy insecurity.
Deficiencies in the physical infrastructure of the home environment included poor quality heating and cooling systems and the use of subpar building materials that can increase energy costs.
In response to these challenges, study participants often devised a variety of behavioral strategies to juggle expenses and cope with the physical and economic facets of energy insecurity.
Limited Options for Assistance
Dr. Hernández also points to the current options to support affected populations such as the Low-Income Home Energy Assistance Program and the Weatherization Assistance Program:
"These programs have historically been underfunded and subject to budget cuts, particularly in recent years," she said. "Greater awareness of the dimensions of energy insecurity and accompanying advocacy may lead to more comprehensive policy measures to expand existing programs in order to ensure that the needs of low-income householders are better met."
Other research by Hernández and colleagues has demonstrated the prevalence and risks associated with energy insecurity.
In a study published last year on how energy efficiency upgrades could help low-income tenants and landlords alike, Dr. Hernández reported that low-income single-family homeowners reaped the greatest direct benefits. However, all respondents experienced enhanced health and safety, improved thermal comfort, and reduced energy costs - $60 per month in some cases - as a result of the upgrades. A study published earlier this year showed that African Americans across the economic spectrum experienced economic energy insecurity at the highest rates while Asian and Latino immigrants were the least burdened. An upcoming study will report on the association between energy insecurity and its effect on mental health.
Co-authors on these studies are Yumiko Aratani, Daniel Carrión, Yang Jiang, Douglas Phillips, and Eva Siegel from the Mailman School of Public Health. The study was supported by a grant from the National Institute of Environmental Health Sciences (#P30ES009089.) Dr. Hernandez also received a JPB Environmental Health Fellowship and a Columbia University Provost award, which also supported this work. No potential conflict of interest was reported by the authors.
Frequently Asked Questions
What does it mean to be underbanked
Being underbanked means a household has a bank account but still relies on services outside the banking system, such as payday loans or check cashing, to manage some of its money needs.
Why do disabled adults often turn to alternative financial services
Many turn to alternative financial services because they lack a bank account, have no credit history, or find mainstream products hard to access, even though these options usually charge higher fees.
What is the digital divide in banking
The digital divide in banking refers to the gap between people who can use online and mobile banking and those who cannot because they lack home internet or a smartphone.
How does a lack of savings affect financial security
Without savings, households have no cushion for emergencies like medical bills or lost income, which can force them into high cost borrowing and deepen long term financial instability.
What role does the FDIC play in tracking unbanked households
The FDIC conducts a national survey that measures how many households are unbanked or underbanked, providing the data researchers use to study financial access across different groups.
Can building a credit history help disabled adults financially
Yes, a credit history can open access to affordable loans, housing, and lower cost financial products, so building one is an important step toward greater economic stability.
What is the National Disability Institute
The National Disability Institute is a nonprofit organization focused on improving the financial health and economic self-sufficiency of people with disabilities through research, policy, and practical programs.
What policies can reduce financial exclusion for disabled people
Policies that help include accessible banking rules, consumer protections against predatory lending, inclusive product design, and programs that support saving and credit building for disabled households.
Insights, Analysis, and Developments
Editorial Note: What makes this research particularly valuable is its recognition that energy insecurity isn't simply about individual financial mismanagement but reflects systemic failures in housing quality, utility pricing structures, and social support systems. The families interviewed weren't reckless spenders but rather people caught in a trap where inefficient heating systems, poor insulation, and outdated appliances turned basic warmth into a luxury expense. The mental health consequences - anxiety, depression, shame, and fear of losing custody of children - reveal how utility struggles extend far beyond the monthly bill. While programs like LIHEAP and weatherization assistance exist, chronic underfunding means most eligible households never receive help. Until policymakers address both the affordability crisis and the infrastructure deficiencies that drive excessive energy consumption, millions of families will continue choosing between heat and food, between electricity and medicine, between staying in unsafe housing and the instability of moving.
Author Credentials: Ian is the founder and Editor-in-Chief of Disabled World, a leading resource for news and information on disability issues. With a global perspective shaped by years of travel and lived experience, Ian is a committed proponent of the Social Model of Disability, a transformative framework developed by disabled activists in the 1970s that emphasizes dismantling societal barriers rather than focusing solely on individual impairments. His work reflects a deep commitment to disability rights, accessibility, and social inclusion. To learn more about Ian's background, expertise, and accomplishments, visit his full biography.