- Area:
- North West 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 North West from falling into the debt trap.
Big Lottery Fund (BIG) today announces funding that will help tenants become more financially aware, more confident in money management - and better able to access financial products and services such as a basic bank account. The projects will be run in Manchester, Liverpool, Tameside, Hyndburn in Lancashire and Knowsley in Merseyside.
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.”
City South Manchester Housing is receiving one million pounds for the Mind Your Money project - a new partnership of 30 organisations that will help social housing tenants across Manchester who are moving in and out of work manage their money by improving their skills, confidence and access to affordable financial services.
The partnership aims to establish a joint protocol amongst at least 22 out of the 27 housing providers to agree trigger points to alert agencies when a tenant has moved in or out of work, so organisations are aware if the tenant is facing financial difficulties. A pre-paid card scheme will be piloted so that tenants can aside keep money for essential bills in virtual jam-jar accounts and use the pre-paid card for their disposable income.
Dave Power, Chief Executive of City South Housing Trust said: “It’s crucial that people getting back into work find themselves better off and still able to pay the rent and other household bills, without being forced to resort to loan sharks or payday loans.
“Mind Your Money will offer a range of practical tools, training and techniques to support jobseekers and people returning to employment to help them keep in control of their finances. Initiatives we’ll be developing a pre-paid card that can be used instead of cash to pay for goods, helping people to keep on top of their money.”
Anna (not her real name) from Manchester has received help from organisations in the partnership after falling into spiralling debt when she and her husband hit hard times.
She said: “I left home at 17 and with no-one to rely on for financial support I set up life on my own. I met my husband and we had two children but because he was on a low wage we found ourselves borrowing money to make ends meet. We took out loans with legal doorstep lenders but then a neighbour recommended someone who did small loans that were flexible when it came to repayments. We borrowed money from him several times and paid him back no problems – until my husband lost his job and we couldn’t afford the repayment.
“We fell into a vicious circle where the loan shark increased our debt each time we couldn’t pay and threatened our lives. We then had to borrow more money from legal lenders to cover basic living costs as we were handing over most of our cash such as my husband’s wage and child benefits to the loan shark. I got a job but had to give it up due to illness caused by stress and anxiety. We ended up with £17,500 of debt.
“Helpful organisations stepped in, gave us a lot of advice and I decided to declare myself bankrupt to make a fresh start. I’ve returned to work part-time and am budgeting better. I hope I never have to take out credit again.”
Liverpool Specialist Advice Services is receiving £968,109 to support vulnerable first time tenants, including those with mental health issues. The project will recruit and train 200 peer mentor volunteers to provide close support for first time prospective tenants.
Another organisation in Liverpool, RAISE Ltd, is receiving one million pounds to improve the financial confidence of tenants moving in and out of work, together with unemployed first time tenants. It will work with 3,000 people to improve their access to affordable financial products and services including bank accounts, savings and credit facilities, life and home contents insurance, wills and pensions services. Social housing providers involved in the project have committed to offer financial advice and support to 5,000 of their tenants.
Tameside Citizens Advice Bureau is receiving £785,858 to help 16-24-year-olds and aims to have 500 fewer tenants falling into rent arrears, with 50 becoming community mentors. These mentors will give advice on budgeting, utilities supply, tax and banking.
In Lancashire, Hyndburn Homes is receiving £513,734 to also help young people with the establishment of a drop in centre and website. Accrington and Rosendale College will develop a project with non-for-profit organisation Shontal 1705 which specialises in debt awareness using live theatre.
Knowsley District Citizens Advice Bureau in Merseyside is receiving £863,858 to help 6,000 social housing tenants over five years. Tenants that benefit from the support will be encouraged to become money champions and share their experiences with other tenants.
Helen Bullough, Big Lottery Fund head of the North West region, said: “We wanted to find a way to prevent debt from starting or getting worse for people on very low income or benefits. BIG’s funding will ensure that social housing providers, advice providers and local authorities can work together to improve the financial confidence of communities most in need.
“Recent changes in legislation, such as the benefits cap and the introduction of Universal Credit - whereby benefits payments go to the head of the household rather than directly to the landlord, mean there is even more pressure on tenants to take responsibility for managing their finances. This means today’s investment could not come at a more imperative time.”
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. 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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