Financial Inclusion Forum 26 th June 2006 “Housing Associations and Financial Inclusion” Dawn Eckersley-Wright Financial Inclusion Manager Places for People Neighbourhoods

Places for People The UK’s largest housing association/regeneration agency 57,000 properties across 225 Local Authority areas Includes Castle Rock Edinvar (5000 properties in Edinburgh and the Lothians)

Places for People Neighbourhoods Mission: “To improve the quality of life for people and communities, particularly those who suffer disadvantage as a result of exclusion from the labour market and inadequate access to essential services”

Key Themes Learning and Employability Business Creation and Enterprise Community Safety Financial Inclusion

“Poverty” or “Financial Exclusion”? Financial Exclusion describes in more detail both the causes of poverty and the consequences A complex issue demanding innovative and cross-agency responses Case for HA intervention: 8 out of 10 financially excluded people live in socially rented accommodation – our problem?

Indicators of Financial Exclusion No access to bank account/insurance Poor financial literacy Debt including rent arrears Problematic credit history Paying more for services and fuel Reliance on extortionate credit Lack of confidence and aspiration

The Cost of Borrowing: £500 over 1 year Capital Credit Union £32.94 (12.68% APR) Provident Personal Credit £325 (177% APR) IS/JSA rates: £34.60 (16/17 yrs) £45.50 (18-24 yrs) £57.45 (over 25yrs)

Provident Financial Home Credit Largest home-collected credit company in the UK 11,600 collection agents Published APR = 177% Annual turnover = £236 million 2004 profits = £60.1 million

PfP and Financial Inclusion “A National Approach to Promoting Financial Inclusion” strategy Financial Inclusion Manager post since December 2004 An approach built on local partnerships and projects A need to involve housing staff Partnerships with other associations

Responses to Financial Exclusion Access to mainstream services such as basic bank accounts and savings accounts Debt advice services Income maximization advice Financial literacy education/advice Sources of affordable credit Recognition of broader social exclusion issues

Practice Examples Newsletter items Direct mailings “Does it Add Up?” Partnerships with credit unions Staff training/local action planning Pre-tenancy engagement Independent advice project (Citizens Advice)

Independent Advice Project Link to DTI-funded debt advice Places for People will resource a central Citizens Advice post and Project Fund Identify dedicated advice provision/respond to slippage in DTI projects Draw Bureaux together to accelerate learning Deliver Quality-Marked, independent advice to customers in arrears

PfP Responses  Financial Inclusion Strategy  Does it Add Up?

Policy Context £120m Financial Inclusion Fund including £45m for money advice/£36m Growth Fund No interest rate cap in sight Social Fund budget increased CU interest up to 26.8% Fuel poverty likely to increase

“Facilitating Access Initiative” Announced 20 th April 2006 Resourced by £20 million of Financial Inclusion Fund A new theme of work from the Financial Inclusion Taskforce Identification of intermediary agencies to address “demand side barriers”

Opinion Leader Research People see benefits of financial services View financial service providers with suspicion People with low incomes sometimes expect to pay more Low awareness of credit unions

Demand Side Barriers Fear of financial institutions (premises, attitudes of staff) Fear of debt (a lack of control and the temptation of credit) A fear of rejection or lack of confidence making informed requests

“Facilitating Access Initiative” Action needed to tackle barriers Community outreach needed/30 areas Need to build confidence and stimulate demand Use of trusted intermediaries “Resources available to support work in communities to deliver objectives and to fund non-mainstream activity”