Over one fifth of UK households have less than £100 in savings to cushion themselves against economic shocks. With Christmas gone, frontline organisations anticipate more money related enquiries from people in need as they seek support with their household finances.
In our first webinar of 2019 we talk to Marie Hardeman from the Guinness Group to hear what budgeting support they give to their tenants.
With Donna Gallagher and Peter Carter, from Policy in Practice.
To find out more visit www.policyinpractice.co.uk, call 0330 088 9242 or email hello@policyinpractice.co.uk.
4. Agenda
Introducing Policy in Practice
Personal debt: the size and nature of the problem
How Guinness Group help their tenants manage their money
Software that can help
Questions & answers with our speakers
5. We make the welfare system
simple to understand, so that
people can make the decisions
that are right for them
10. Debt: the scale of the problem
• 8.3million estimated number of over-indebted people in the UK
• 22% of UK adults have less than £100 in savings
• 40% of reported debt problems in 2017-18 relating to debts owed to government,
up from 21% in 2011-12
• £248 million, NAO estimate the minimum annual cost to public purse
• £15 billion total outstanding mortgage arrears in 2018
• £18 billion estimate of personal debt owed to government, utility companies,
landlords and housing associations
• 4 in 10 estimated proportion of people in UK who cannot manage their money well
day to day
• 600,000 estimated number of people who need debt advice but are unable to
access it
Tackling problem debt, National Audit Office, August 2018
12. Unsecured debt per
household rose to
£15,400 in the third
quarter of 2018.
This was a rise of
£890 on a year ago.
A rise in unsecured debt in 2018
13. Total unsecured
debt has risen to
£428 billion.
At 30.4% of
household income,
this is higher than
before the financial
crisis
Unsecured debt as a share of Income
14. Triggers for problem debt
• Redundancy
• Unemployment
• Illness and disability including mental health issues
• Debt consolidation
• Divorce/separation
• Benefit changes (benefit cap, LHA, 2 children limit, self-employed)
• Gap in benefit income (wait for UC, wait for WCA, sanctions)
• Persistent low earnings
- changes in employment structure
- Freezing of working-age benefit support
The key message from all research around debt is that most households are not
protected from accumulating debt if they face a trigger situation
15. Supporting people to manage money
Detrimental to people’s wellbeing – increase of stress, anxiety, time off work and
relationship breakdown
Debt is often hidden
Problem debt negatively affects housing situations
Debt needs to be controlled, split and prioritised
Importance of lifting the debt burden
Difference between Debt and Budgeting advice
Range of support available for residents such as maximising income and completing
income and expenditure
27. Next steps
Download Benefit and Budgeting Calculator flyer
Download Example of household who’s situation has stabilised
Short survey:
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Data analytics: Who’s missing out on benefits in your area?
Wed 20 Feb 2019 at 10:30
What do you find are the main causes of debt for your customers?
Overspending
High interest charges
Lack of financial knowledge
Income shock
Insufficient income
Since 2011
TUC reveal debt has hit a new record of £15,400 per household
Unsecured debt per household rose to £15,400 in the third quarter of 2018 – a rise of £890 on year
Includes consumer credt, student locans, pay day lending but excludes mortgates
Money Advice Service
Debt advice is first and foremost about getting people back in control of their finances to meet their essential needs and where possible other financial commitments. Budgeting support puts some people in a position where they can meet their obligations without further assistance.
According to research commissioned by StepChange chronic and unmanageable debt is a driver of many financially and emotionally costly problems, including; mental health, increased likelihood of being NEET for children within financially-distressed families, relationship breakdown, an increased risk of children being taken into care, an increased need for temporary housing, and an inability to maintain employment. Consequently it tends to be an escalating and repeating problem, with more debt being taken on, if the underlying behavioural and circumstantial causes are not addressed.
What are the main challenges your customers face when trying to budgeting?
Expenditure exceeds income
Prioritising debts
Coping with the cost of living
Reducing outgoings
Improving their financial skills
Guinness – National Housing Association. 65,000 homes. 140,000 customers. 165 local authority areas (let alone job centres)
Customers – 3 different budget calculations, inconsistent approach and service. Different conversations depending on the intended outcome.
Technology – no visibility internally, no future proofed model for self serve and digital platforms incl. mobile working
Policy in Practice – 16 years local gov, Revs and Bens then evolved to include welfare and prevention – Croydon. Worked with Devan and Jade to analyse our data and the impact welfare reform, particularly UC would have on our customers
Budget calculator in place but looking to branch out to HAs. Great opportunity to work together again.
What attracted me to the calculator – one tool, better off scenario, action plan, self serve options
How did we launch it.
3 services; lettings, CAT, CST. Working group, ops managers, team managers, advisors/officers. Demos, changes, testing.
Launch/roll out – voyage, classroom environment with test cases, PCs, mixed groups
Usage targets; lettings 100% affordability, CAT 75% arrangements, CST 100% referrals
Incentives around targets
Demonstrate benefits; better conversations, better lets, improved arrangements (sustainable), evidence at court, identify maximisation opportunities, appeals/reconsiderations
Monthly then quarterly reviews; improvements, changes, usage etc.
55,752 completed assessments
New to saved
Budget advice
Scenario caparison
Affordability assessments. Arrears repayment plans.
Staff engagement scores
Conversational skills/solution focused/informed decision making
Involved in the development and evolving use of the tool
Self serve – do it!
Assisted – more UC calcs, better off, action plans
Use the data to focus our engagement
Self serve – do it!
Assisted – more UC calcs, better off, action plans
Use the data to focus our engagement