2. Financial Inclusion – How you can make it work Sylvia Korn, DWP Bernadette Sweeney, QXHA Fiona Richardson, SIMLU

3. Why bother? Because UK Debt Figures show: UK wide debt is £1.3 Trillion (including mortgages) We owe £221 billion on credit cards Average total household debt is £13,153 (+ or -) 8 out of 10 financially excluded people live in socially rented accommodation Poverty has a bearing on an individual’s health Money spent on interest – better spent in local economy

4. Indicators of Financial Exclusion No access to bank account/h’hold insurance Debt (including rent arrears) Problematic credit history Paying more for services and fuel (fuel poverty) Reliance on extortionate credit Lack of confidence & limited aspirations Health problems – as a consequence of debt

5. Excluded Person No insurance No Savings /Debts Poor Financial Capab. Rent arrears Health problems High Interest Loans Fuel Poverty

6. There is also a business case to help Money spent on “high interest rates” better spent in the LOCAL economy For credit union’s – more people saving – more dividends – fulfilling social help ethos For social landlords – less defaulters – less rent arrears - less voids For the individual – step towards asset ownership, inclusion and better employment prospects

7. Responses to Financial Exclusion Access to mainstream services (basic bank accounts, savings accounts, insurance) NLTM Money/Debt advice services - £5M+ pa Income maximization (benefits) advice Financial literacy education/advice (CABx) Links to affordable credit providers Recognition of broader social exclusion issues Financial Inclusion Funding of 11 LA’s

8. So How does financial exclusion manifest itself? Tenants unable to sustain a tenancy Rise in voids Health Problems Payment arrears Demand letters/ Threats Difficulty in leading a normal life Family relationships breakdown Borrow money from “anyone” Local economy suffers Fuel Poverty (419,000) H’holds No household insurance

9. UK wide government funded “financial inclusion” initiative November 2006 – April 2008 Focuses on areas of high exclusion Seconded Stakeholder Managers – UK wide work with “intermediaries” at a local level

10. NLTM Objectives: –Encourage take up of financial products & services –Increase awareness of affordable credit & move people away from loan sharks –Raise awareness of availability of money advice –General awareness raising with those who work with the financially excluded-what is available

11. Money & Debt Advice Myths and legends – it’s only “the poor” Half of debt problems unplanned “Life events” (divorce/ill health/redundancy) People bury their head in the sand Don’t know where to turn Aren’t confident seeking advice Don’t know what they are entitled to Important to seek help asap – it’s FREE Range of alternatives available …

12. Any Citizens Advice Bureau Citizens Advice Direct – 0844 848 9600 CCCS (Consumer Credit Counselling Service) – 0800 138 1111 National Debtline – 0808 808 4000 Now Let’s Talk Money – 0800 012 1656 And ……….

13. Bernadette Sweeney QUEENS CROSS HOUSING ASSOCIATION MONEY AND DEBT ADVICE SERVICE

14. Queens Cross Housing Association

15. Money And Debt Advice Service Financial Inclusion Service

16. Queens Cross Housing Association is a social landlord who provides accommodation to over 2128 tenants, also factor 1200 owner occupiers along with factoring 110 commercial properties a)Housing Support b)Volunteer Project c)Youth Project d)Welfare Rights

17. Welfare Rights In 2006/2007 150 new clients referred Estimated £576,400 in benefit income for local residents

18. Partnership Working  Queens Cross Housing Association work in partnership with Blue Triangle Housing Association, Move On and Glasgow Simon Community  This service is aimed at people who are homeless or faced with homelessness  Since July 2002- 765 clients referred to the project, total debt £1,706,968  Project funded until March 2008 from Homelessness Partnership and DRS

19. Financial Inclusion Service  Provide a money and debt advice service to Queens Cross Housing Association and Glasgow Housing Association residents living within the Maryhill area and in North and North West Glasgow  Service will target vulnerable, low income families and individuals.  Recruit/train volunteers in basic money/debt advice

20. Financial Inclusion  Volunteers will be crucial in providing people with skills and knowledge  Increase volunteers practical skills and knowledge in both volunteering and future employability  Provide a volunteer hub centre, which will be used for volunteers to address local issues within the community

21. Financial Inclusion Service  Financial Responsibility  Managing on a low income  Budgeting  Bank accounts  Other financial products

22. Financial Inclusion Service  Build a customer base  Consolidate and sell the service to other agencies  Refine the service tailoring to a range of differing customers

23. Affordable Credit – people often get into the “debt cycle”for small amounts (£500) 55% of low income households have no savings “1.5 million people in the UK are falling behind with bills or credit card commitments” (FSA research) Where are your tenants, customers or clients going? Could you help signpost them on…………..

24. CREDIT - WHERE CAN I GET IT IF I NEED IT? Oldest and largest lender in the UK 1.5 million customers(60% market share) 11,500 agents £940.8m credit issued (2006) - APR of 177% Shopacheck - APR 246.5% Greenwoods - APR 399.7%

25. Comparison Table

26. Typical doorstep customer: Working age but not working Women aged 25-34 years old – with children 50% will have an income under £13,000 Within the most disadvantaged neighbourhoods

27. Growth Fund - £42M UK wide Pollok credit union Western Isles Credit Union Glasgow Credit Union* Dumbarton Credit Union Capital CU, Edinburgh & the Borders Scotcash, Glasgow (CDFI) 1 st Alliance CU, Ayrshire* North East Scotland CU, Aberdeen Scottish Government - SGEI Livingston Credit Union Dalmuir Credit Union Yoker Credit Union Craigmillar Credit Union, Edinburgh Scottish Transport Credit Union (Scotland wide) “AFFORDABLE CREDIT” AVAILABLE VIA VARIOUS GOVERNMENT SCHEMES Check with your local Credit Union what products & services they offer

28. Fiona Richardson Scottish Illegal Money Lending Unit 0141 287 6655

29. Basic Bank Accounts – can be a stepping stone to wider inclusion Background - 2M people unbanked –Because its safer (Farepak) –Paying by Direct Debit entitles you to a discount on utilities –It gives you a credit history –You can cash cheques for free – unlike Cheque Cashing –POCA’s are being phased out (2010) – to be replaced by? –Local Housing Allowance – direct to tenants –Tenants who pay by direct debit are less likely to default

30. GETTING STARTED ………… Make a business case for getting involved What can you contribute Identify key organisations you will need to work with – can only be done with a multiple approach Work up a FI action plan(can get help with this) See if LA/government support is available What is going on locally What are national organisations doing? Practically, what can you do internally How can you get people interested?

31. Generally……. Find out where the local credit unions/housing associations are in your area Do they offer the “white goods” scheme/£1 start up? How and where to signpost for money advice? Speak to your local CAB What are the benefits of opening a basic bank/CU account – to individual & org? Targeted intervention? There are lots of goods web sites – check them out

32. What can you do to make financial inclusion work? Identify what the benefits are Think of how you will turn your ideas into action Try and “mainstream” your ideas into everyday practices Don’t re-invent the wheel - speak to people in the same “area” who are already working with the financially excluded Train frontline staff to identify “danger” signals Get help in drawing up an action plan (NLTM) Adopt “preventative” approaches Think about targeted intervention? Are your client/tenants getting the benefits they deserve?

33. Contd……. Find out if your local authority is doing anything locally Speak to the Financial Inclusion team within Scottish Government Speak to the Now Let’s Talk Money rep Would you like to hold a staff training workshop, small local seminar or even get some flyers printed?

34. Housing Associations Impacts on housing – 29% move on within 20 weeks of seeking debt advice Case for HA intervention: 8 out of 10 financially excluded people live in socially rented accommodation – your problem Move away from: Action Tenancy Rent arrears EvictionVoids

35. Newsletter item/leaflet Direct mailing to tenants Verbal information Partnership with local CU Staff Training/ Local action planning Pre tenancy engagement Independent Advice Project Rent paid by direct debit Pay £1 joining fee Do you offer Insurance with rent?

36. Further points …… Joint working is key Someone to co-ordinate services Don’t expect a quick fix (chaotic lifestyles) Mainstream into everyday working What are Loc Govt and Central Govt doing Where can I get funding Don’t be afraid to adapt/adopt best practice Remember there will be a ‘time’ commitment

37. Summary Financial Exclusion is related to broader social exclusion issues It is about lack of access to mainstream services (A, B, C) Upskilling intermediaries and their frontline staff Letting public know there are choices Giving people the confidence to make informed decisions Freeing people from Loan sharking and illegal money lending Health implications Putting money back into local economy Encouraging dialogue/Joint working