How to find the right debt solution for everyone

How to find the right debt
solution for everyone
Wednesday 11 November
Policy in Practice
webinar

Housekeeping
www.policyinpractice.co.uk
● Audio check
● Please ask questions throughout
● Download, polls and a survey
● Aim to finish by 11:30 with optional 15 min demo
● Armistice Day observation at 11:00
● Slides and recording will automatically follow
● Follow us on Twitter via @policy_practice

Today’s speakers
Zoe Charlesworth
Director of Policy and
Operations
Policy in Practice
@ZoeCharleswort1
Carole Kenney
Director, Welfare and
Customer Care
CDER Group
@CDERGroup
Gareth McNab
Social Innovation Lead
Nationwide Building
Society
@McnabGareth
Sarah Lambert
Affordability
Assessment Sales
Manager
Policy in Practice

Give the best support
you can to help people
on their way
policy
software
analytics

A team of professionals with extensive knowledge of the welfare
system. We’re passionate about making social policy work
We help over 100 local authorities use their household level
data to identify vulnerable households, target support and track
their interventions
Our benefit calculator engages over 10,000 people each day.
We identify the steps people can take to increase their income,
lower their costs and build their financial resilience
Policy in Practice: What we do

Agenda
● Our financial resilience before and after Covid-19, and in the future
● The main challenges facing the collections sector now, and in the future
● The main challenges facing the lending sector now, and in the future
● How to help people to build financial resilience
● Questions and answers
● Optional 15 min demo of the software shown

777
Poll: At the start of 2020 what
percentage of households didn’t have
enough savings to live for a month
without income?

888
Poll: How many households have
missed a Council Tax payment during
the pandemic?

999
Over to Zoe

Pre-Covid financial resilience: many
unprepared for income shock
At the start of 2020:
● 10% of households in the UK had no savings
● 30% of households had less than £600 savings
● Average household financial debt rose 9% to £9,400 in 2019
● 44% of those in debt found it burdensome
● 41% of households don’t have enough savings to live for a month
without income
Sources: Global Banking and Finance, Gov.uk, Money Advice Service, ONS

Impact of Covid
● 5.7m in receipt of Universal Credit (September 2020) - a 90% increase
● 2.7m people were unemployed and looking for work, 117% increase since
March 2020 (August 2020)
● 7.5 m furloughed workers (August 2020)
● 800,000 job losses since Feb 2020 (latest estimate of 2m by April 2021)
Increase in debt
● 6 million adults across the UK have fallen behind on at least one bill during
the pandemic
● 2.8 million households have missed a council tax payment
Sources: ONS, OBR, DWP, Citizens Advice

Unemployment caused by a few factors

The second safety net
The welfare support system has its own
welfare support system
Welfare benefits are insufficient for many
households
Risk factors:
● Tenant
● Children
● Previous debt
Foodbanks project a 150% rise in 2020/21
(Source: HoC briefing Nov 20)

Support measures
● Coronavirus Job Retention Scheme (furlough scheme)
○ Up to 80% of wages (up to £2,500) until the end of March 2021.
○ Must be on PAYE payroll on 30 October 2020. Ex-employees on the
payroll on 23 Sept 2020 can be re-employed and furloughed
● Self employed grant is to be extended
○ 3 months from Nov 2020 to Jan 2021 with a further grant from Feb - April
○ 80% of trading profits (up to £2500/month)
● MIF suspension extended to end April 2021
● Further grants for businesses
● Payment holidays (up to a total of 6 months)
● Eviction protections
● Benefit increases; LHA to 30 percentile, MIF suspension, £20 uplift
● £170m to councils to provide Christmas support with bills

Many people fall through the gaps
● Employed and self-employed not eligible for support schemes
● Households not eligible for UC
○ partner’s income
○ over £16,000 capital
○ No Recourse to Public Funds
○ students
● Those that do not benefit from Covid benefit uplift
○ legacy benefits and should not move
○ benefit capped

Interaction of poverty and collection rates
Poverty
Local authorities with higher
levels of relative deprivation
tended to report lower council
tax collection rates

More uncertainty on its way
Forthcoming changes
● 10% of furloughed workers likely to be made redundant (OBR); with second
lock-down this may increase
● Emergency benefit increases to end in April 2021
● Brexit

Support is available
www.policyinpractice.co.uk/coronavirus

191919
Carole Kenney
Director, Welfare and Customer Care
CDER
President, CIVEA

In Operation
Fairness
How to find the right debt solutionfor
everyone – 11th November 2020
Carole Kenney
Director Welfare & Customer Care
President, CIVEA

21
Civil Enforcement
• CIVEA represents 95% of the industry, 33 enforcement agencies and 2000
enforcement agents
• CIVEA members collect over £550m per year at no cost to the public purse
• Debts past to enforcement agencies are largely debts owed to local or
central government which have already been to court and a warrant
obtained (council tax, business rates, parking fines, magistrates court fines)
• During the compliance stage of the process enforcement agencies are
utilising the same collection strategies, technology and data sources as
private debt collection agencies.
• Over 50% of cases passed to an enforcement agent are collected at this
stage and without the need for a doorstep visit.
• 64% of council tax cases passed to enforcement agents were resolved via a
repayment plan.
The Local Government Association has warned Local Authority’s face a
£7.4bn shortfall in funding due to impact of Covid-19 on council revenue
“65% of adults
believe local
services, such
as social care,
would be put at
risk if fewer
people paid
their council
tax”
YouGov survey
August 2020

22
Main challenges for enforcement and
collections sector
1. The collection of debt is considered unfair during a global pandemic?
2. Customer engagement remains low – negative perception of creditors and collections
agencies.
3. The number of customers facing financial volatility expected to increase
significantly – a new type of debtor
“13 million people in the UK lack any savings to fall back on should they suffer a
25% cut in income”
(source: Financial Inclusion Commission)

23
FAIRNESS FRAMEWORK
Purpose: to define a new framework to embed “Fairness” in everything we do
This framework is intended to demonstrate the values and principles we uphold, together with the working
practices we ensure we undertake, in all of our engagements with clients, customers (debtors) and
employees – setting the standard as a responsible operator in the collections and enforcement industry.
Charter
Our declaration of principles and practices
that embody how we promise to treat
everyone “Fairly”
Framework
Our structured model ensures Fairness
is pervasive and considered at every
touchpoint

Fairness Charter May 2020 V0.1

26
FAIRNESS & VULNERABILITY
We work hard to identify and differentiate the approach taken between those customers who
cannot pay their debt due to vulnerability or hardship; those who are in a position to pay their
debt but may need time and support to do so; and those who have the means to pay their debt,
but choose not to.
The collection of public debt must be fair and
proportionate and we cannot ignore the
impact Covid has had on people’s finances or
mental wellbeing.
Balancing the collection of unpaid taxes and
fines and the ability of the customer to repay
is crucial to the implementation of our fairness
strategy.
Analytics prove that debt which is allowed to
stagnate becomes more difficult to collect and
is less fair on the customer.
Fluid engagement will achieve a more
successful outcome and understanding an
individual’s circumstances and providing them
with the opportunity to repay via a plan which
is affordable and sustainable is more likely to
result in full payment and future compliance.
Equally, identifying vulnerability and the need for reasonable adjustments or support early in the process leads to a better
outcome for the customer and creditor.

27
Vulnerability Strategy
Defined principles for identifying and supporting vulnerable customers
Fairness must be embedded at the
heart of the organisation and touch
every aspect of the business.
It is not OK to just say it – we
must live it, breathe it, deliver
fairness in operation and
challenge ourselves regularly
through independent scrutiny.
CDER meet the Customer Service
Excellence Standard and were
awarded 12 compliance plus
marks for the Fairness
Framework and our commitment to
delivering effective recovery of
public debt whilst supporting
vulnerable individuals.

28
Supporting Financial
Vulnerability
Core Principles – Affordability, Flexibility, Independent Debt Advice

29
Case Study: Alexandra
Council
Tax
Due
• Council Tax Bill, instalments agreed
• 2 Missed instalments – 2 x reminder letters
• Summons, Liability Order granted by Magistrates
• 14 day letter issued advising enforcement agents will be instructed
Compliance
Stage
• Notice of Enforcement issued
• Telephone number obtained through standard search
• 3 x outbound calls & 3 x SMS sent
• Compliance letter issued including Welfare information and signposting
• Pre enforcement letter issued
Enforcement
Stage
• EA visit, no response
• EA receives call from customer who agrees to lump sum payment £399 and £100 per month
repayment plan to clear by end of tax year.
Welfare
Stage
• Customer calls crying and apologising for not dealing with this sooner but the payment she
made to the EA left her with £1 in her bank account and now she has no money for food.
• She is transferred to Welfare team who arrange immediate FAST payment refund, place her
case on hold and schedule a video call for the following week to carry out affordability
assessment.
• The affordability assessment is carried out using BBC which identifies eligibility for working
tax credits, SPD and an action plan agreed to review utility provider.
• Alexandra recently went through a relationship breakdown and is a single parent on low
income. She was embarrassed and afraid to ask for help. A temporary repayment plan was
agreed until March when it will decrease to enable payment of ongoing liabilities.
“Dear Emma,
Thank you so much
for your support. In
this difficult climate,
you have reassured
me and truly made a
positive difference to
my life. In line with a
lot of the country,
money is especially
tight at the moment as
I am supporting my
parents who are
shielding. I promise to
contact you
immediately if I have
any issues making my
payments.
Thank you so so
much, Alex”

30
Action
1. Remove the stigma of debt and the perception of
collections
2. Continue to improve customer engagement
1. Embed robust framework and policies for assessing
affordability
1. Empower staff to “do the right thing” and be flexible with
resolutions

© CDER Group Limited 2020. All
rights reserved.
The contents of this document are
confidential
to CDER Group Limited. It contains
information which constitutes CDER
Group’s trade secrets. The company
or organisation to which this
document is addressed must not use
or disclose those contents to anyone
except in accordance with any non-
disclosure agreement entered into
between CDER Group Limited and
that company or organisation.
Carole Kenney
Director, Welfare & Customer Care
President, CIVEA
carole.kenney@cdergroup.co.uk
07710 096 634

323232
Poll: How would you rate your
knowledge of the welfare system?

333333
Gareth McNab
Social Innovation Lead
Nationwide Building Society
gareth.mcnab@nationwide.co.uk

Lending sector challenges
Three challenges facing the lending sector in a mid / post-Covid world
1. Loan origination: Who do you lend to, and how?
2. Product design: How do you build products that better fit real life, cradle to
grave?
3. Service design: How do you make most benefit of moments of truth, and in
whose interest?

Tool we use
Policy in Practice’s Benefit and Budgeting Calculator
1. Budget: ONS comparables
2. Benefits: smooth journey and helpful outputs
3. Beginnings: standalone information is good, but building momentum towards
action is better

363636
Over to Sarah

How to engage customers earlier
Many people will need support
from the welfare system for the
first time and won't know what
they can claim or how
People don't have to be experts
to have confidence they are
receiving accurate guidance.
With so many support schemes available customers are empowered and have
increased confidence
Reduce poverty, increase financial resilience and avoid detrimental mental health
caused by financial uncertainty

Complete an affordability assessment
Complete affordability
assessments via the industry
standard financial statement
Ensuring consistency for people
when gathering their income and
expenditure information
Save, print and download results allowing your customers and clients to share
their assessment with other creditors.
Meeting the requirements of data portability under GDPR and guidance from
regulators

Give support with budgeting
Access cost of living data to help people
find ways they may be able to reduce
their costs
Understand the full picture of your
customers and client’s circumstances

How to improve financial resilience
Fluctuating income makes budgeting
very difficult
Unstable income from work causes
fluctuations in UC payments
People can understand how changes
in employment will affect them
financially

414141
Questions and answers

● Benefit and Budgeting Calculator
● For up to date information on the welfare support available see
www.policyinpractice.co.uk/coronavirus
● Download our new product brochure
● Follow up email with webinar recording and slides, with links
● Short survey to follow now
● Send us your stories about the benefit cap to hello@policyinpractice.co.uk
● Next webinar:
○ Wed 9 Dec: 2020: A policy review of the year, and look forward to 2021
Practical tools that can help
www.policyinpractice.co.uk/events

434343
Poll: Join us for a look at the software
in more detail

444444
Over to Sarah for a quick look at the
software

454545
Thank you
Carole Kenney, CDER Group and CIVEA
Gareth McNab, Nationwide Building Society
Zoe Charlesworth, Policy in Practice
Sarah Lambert, Policy in Practice
hello@policyinpractice.co.uk
0330 088 9242

How to find the right debt solution for everyone

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie How to find the right debt solution for everyone

Ähnlich wie How to find the right debt solution for everyone (20)

Mehr von Policy in Practice

Mehr von Policy in Practice (10)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

How to find the right debt solution for everyone