- Area:
- East of England
- Programme:
- Improving Financial Confidence
- Release date:
- 22 8 2012
Money saving expert Martin Lewis is backing a multi-million pound Big Lottery Fund announcement today aimed at preventing thousands of the most vulnerable people living in social housing across the East of England from falling into the debt trap.
Big Lottery Fund (BIG) today announces funding that will help tenants in Norwich, Great Yarmouth and Fenland in Cambridgeshire, become more financially aware, more confident in money management - and better able to access financial products and services such as a basic bank account.
People without access to basic financial products are facing a poverty premium as they pay more for everyday services – and not having a bank account can even act as a barrier to work as some employers require bank accounts for payment of wages or salaries.
Martin Lewis, creator of MoneySavingExpert.com, said: “Disgracefully, it costs more to be poor.The poverty premium means, from household goods to energy bills, things are more expensive for those with little cash as they need to borrow to buy or don’t get the direct debit discounts others take for granted.
Martin continued: “Sadly we still don’t have compulsory financial education on the curriculum, and even then, more will be needed to help the financially excluded. This is even more important as the universal credit means many on benefits will have to take greater control of their own money management.
“The Big Lottery Fund’s Improving Financial Confidence programme is a good step towards that and should provide help and information to 150,000 people who find themselves without access to products and services like bank accounts or contents insurance. Hopefully it will reduce the risk of desperation driving people into relying on costly payday loans or even loan sharks.”
Cotman Housing Association is receiving £974,950 for a project to support first time social housing tenants throughout Norwich by promoting access to mainstream financial products and helping give them the confidence to make informed choices. The project will work with 4,460 tenants over four years.
Some of the help includes practical and fun courses like ‘Come Dine with Me Cheaply’ on shopping and cooking on a budget and ‘Cars, Automobiles and the Price of Wheels’ on the financial pros and cons of car ownership, insurance and tips on car maintenance. Another course, ‘Paint Pots and a Brush with Money’, advises on simple but money-saving home repairs, cheap furniture and low interest rates on white goods.
Jane Warnes, Cotman Housing’s Association’s Director of Neighbourhood and Support Services, said: "We know that a lack of financial confidence leads to tenancy failure, either directly through eviction or because vulnerable households get into debt or are unable to manage household budgets effectively.
“We want to empower new customers of social landlords throughout our city to develop budgeting and negotiation skills which will stay with them for the duration. We will introduce a varied package to achieve this, including creative courses relevant to setting up home for the first time to make learning fun as well as practical.
“Our project is particularly important in the context of welfare reform and universal credit. As well as benefiting clients, we are conscious that the forthcoming welfare reform agenda poses challenges and we believe that there is a strong business as well as social case to our vision."
Cotman Housing tenant Paula Snelling, spent 14 years in debt. Now in her thirties, Paula recalls the chain of events:
“My parents split up and my mother, brother and myself ended up in social housing. My mum was at home looking after my brother and I was a YTS apprentice hairdresser receiving £35 a week. Not knowing any better, I took out a loan from the bank to buy clothes to look presentable for work. I then changed my career and got a telecommunications job. Things were looking up. I was earning a decent income working overtime, I learned to drive and bought a car on finance. The trouble was the finance was based on working overtime. I had a car accident, got a whiplash injury which meant my employer wouldn’t allow me to do any overtime. So I had to take up various second jobs just to keep my head above water. At one time I was working 8am until 1pm in the office, then 2pm until midnight in a bar just to pay off the debts. I was living off credit cards, which only increased my debt.
“At 26 I took out one last loan and decided to work hard to pay off by debts of £32,000. But two years later I suffered two prolapsed discs in my spine. I found it difficult moving between offices and my fixed-term contract wasn’t renewed. I’m now classed as disabled with severe mobility problems.
“When I bought the car aged 19 I didn’t know what 19.6 % APR meant – and the £8,000 car ended up costing me £12,000. I’m now 34 and I only paid off my debts last year. If only I’d had some advice I wouldn’t have got into the mess that I did. ”
Roddons Housing Association is receiving £999,817 to help first time tenants and those moving in and out of work in Fenland, Cambridgeshire. The project will work with 2,500 beneficiaries.
All new housing tenants will receive a mandatory welcome meeting covering budgeting and benefits advice. Tenants will be encouraged to attend workshops on eating cheaply, choosing the right energy tariff and raising the awareness of loan sharks. An ICT training and laptop loan service will give people six hours of one to one tuition focusing on IT skills and personal finance.
The Great Yarmouth Community Trust is receiving £574,678 to help social housing tenants involved in seasonal work in the area access appropriate and affordable financial services to reduce the risk of eviction and rent arrears. By doing this the trust aims to reduce the number of tenants in serious rent arrears or receiving notice of eviction by 40 per cent. A pool of trained volunteers will be developed to work with their communities to support tenants manage their money
Sara Betsworth, Big Lottery Fund Head of East of England region, said: “We wanted to prevent debt from starting or getting worse for people on very low income. When you have very little and you don’t have the confidence to work through the maze of modern money management, it can be tough getting the right support.
“BIG’s funding will ensure that social housing providers, advice providers and local authorities in our area can work together to improve the financial confidence of people most in need.”
Figures released this month by the Insolvency Service* show there has been close to a 10 per cent surge in debt relief orders since the same quarter last year. And the latest Department of Work and Pensions Family Resources Survey** published in June shows that 16 per cent of people on the lowest income (less than £100 a week) still do not have access to a bank account – compared to just three per cent of the general population. Some 14 per cent of young people do not have an account.
Further Information
Big Lottery Fund Press Office: 020 7211 1888
Out of hours media contact: 07867 500 572
Full details of the Big Lottery Fund programmes and grant awards are available on the website: www.biglotteryfund.org.uk
Ask BIG a question here: https://ask.biglotteryfund.org.uk
Follow BIG on Twitter: www.twitter.com/BigLotteryFund #BIGlf
Find BIG on facebook: www.facebook.com/BigLotteryFund
Notes to Editors
- The Big Lottery Fund (BIG), the largest distributor of National Lottery good cause funding, is responsible for giving out 40% of the money raised for good causes by the National Lottery.
- BIG is committed to bringing real improvements to communities and the lives of people most in need and has been rolling out grants to health, education, environment and charitable causes across the UK. Since June 2004 BIG has awarded over £4.4bn.
- The Fund was formally established by Parliament on 1 December 2006.
- Since the National Lottery began in 1994, 28p from every pound spent by the public has gone to good causes. As a result, over £28 billion has now been raised and more than 383,000 grants awarded across arts, sport, heritage, charities, health, education and the environment.
- The latest Insolvency Service statistics can be found here: http://www.bis.gov.uk/insolvency/About-us/our-performance-statistics/insolvency-statistics
- **The full Department of Work and Pensions Family Resources Survey can be found here: http://research.dwp.gov.uk/asd/frs/2010_11/frs_2010_11_report.pdf
- ***A consortium led by the National Housing Federation (NHF) produced the scoping document that helped inform the development of IFC. It is accessible here http://www.biglotteryfund.org.uk/prog_improving_financial_confidence_scoping_document.pdf
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