- Area:
- South East 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 England from falling into the debt trap.
Big Lottery Fund (BIG) today announces almost £900,000 funding that will help tenants in Slough to 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.”
Shelter in Slough has been awarded £899,125 for its Feel at home with your Finances five year programme. Slough has the second-highest eviction risk outside London, with the rate of possession claims being more than double the regional average (source: Shelter Eviction Risk Monitor December 2011).
The initiative aims to ensure the vast majority of new and young existing tenants taking up social tenancy in Slough are consistently equipped with the necessary information, financial skills, confidence and access to suitable products and services to manage their financial affairs competently. It will target 2,000 people, seeking to ensure that 85 per cent of new social housing tenants sustain their tenancy beyond the 12 month introductory tenancy. The partnership will also show the extent to which cost savings could be obtained through participation in financial inclusion services when compared to arrears and eviction costs.
The project will be delivered through four strands of work, which will include distributing information packs to potential new tenants; developing a flexible training 'passport' to specifically cater to the training needs of each tenant; offering additional personalised support for tenants identified as high risk eg. those at risk of a tenancy termination or those requiring help with literacy or numeracy; and mentoring delivered by tenants who are confident to pass on their skills to others. In the second year the project will recruit volunteer mentors from five wards in the borough and this will expand to all wards by the end of the project, the aim being to allow greater access to this service beyond the life of the project.
The project is a partnership programme with Citizens Advice Slough, Bracknell and District CAB, Slough Federation of Tenants and Residents, A2Dominion Group, Catalyst Housing Group, Slough Furniture Project and Slough Borough Council.
James Merritt, Shelter Thames Valley Manager, said: “Shelter is delighted to have been awarded this grant, allowing us to join forces with Citizens Advice Slough to help more people. Our project will train and support new tenants and young people in Slough, building their financial confidence, and reducing their risk of falling into rent arrears. We look forward to working with all our partners, including landlords and community groups, to support 2,000 local households over the next five years.”
Single mum Ruth Myers, a primary school cover supervisor, lives in social housing in Slough with her 16-year-old daughter. She has been paying her rent each month and has also been working hard to pay back rent arrears which she had built up previously. Ruth has experienced some health problems following an accident, but continued to go to work. She was just about managing to get by until her hours and salary were cut back in the recession. To make matters worse Ruth’s child tax credits were recently cut - the drop in her income pushed the family to the brink. In order to buy food and pay the bills, Ruth had to resort to high-interest payday loans. This left her worried that, despite working, she was not going to be able to keep up all the repayment terms on her debts, totalling around £5,000. Shelter’s local advice service was able to help Ruth to manage and reduce her debts, but if the organisation had been able to work with her at an earlier stage, she might have been able to avoid getting in so deep.
Ruth, 41, said: “They helped me to get everything sorted out. They gave me a letter to send out to my creditors so they all knew exactly what was going on. It just took the pressure off.
“I’d budgeted on my wage but when they were cut by such a substantial amount I couldn’t afford to pay all the monthly payments, I just ended up getting behind on everything. It just snowballed into a real problem. It was awful, I was on medication for depression, I didn’t want to see anyone or do anything.”
The high interest pay day loans were a major cause of stress, she said. “I wouldn’t recommend them to anyone. If your car breaks down, that was how my situation started, you have got to do something and somebody that hasn’t got a brilliant credit rating ends up having to resort to these lenders. They are horrific, you miss a payment and the interest is huge.”
Sacha-Rose Smith, Big Lottery Fund’s Head of the South East region, said: “Today there is even more pressure on tenants to take responsibility for managing their finances, given the introduction of the benefits cap and Universal Credit – meaning housing benefits payments go to the head of the household rather than directly to the landlord.
“I am confident this timely investment will help thousands of the most vulnerable people in social housing to avoid getting trapped in the spiral of debt and resorting to payday loans.”
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.
- * Debt relief orders are an alternative to bankruptcy for people who do not own their own home on low incomes with £50 or less disposable income per month and with debts of less than £15,000. The number of debt relief orders made in the last quarter is almost 8,000. The latest Insolvency Service statistics can be found here: http://www.insolvencydirect.bis.gov.uk/otherinformation/statistics/201208/index.htm
- **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
- **** Department for Business Innovation & Skills Interim Evaluation of the National Illegal Money Lending Project – Fina report – the evidence base. Policis, 2010
http://www.policis.com/pdf/Illegal_Lending/BIS%20IML%20Evaluation%20Summary%20Report%20Final%2008102010.pdf
Tags