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Financial Inclusion Forum 26 th June 2006 “Housing Associations and Financial Inclusion”

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

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Financial Inclusion Forum 26 th June 2006 “Housing Associations and Financial Inclusion”

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  1. Financial Inclusion Forum26th June 2006“Housing Associations and Financial Inclusion” Dawn Eckersley-Wright Financial Inclusion Manager Places for People Neighbourhoods

  2. 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)

  3. 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”

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

  5. “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?

  6. 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

  7. 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) The Cost of Borrowing: £500 over 1 year

  8. 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

  9. 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

  10. 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

  11. 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)

  12. 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

  13. PfP Responses • Financial Inclusion Strategy • Does it Add Up?

  14. 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

  15. “Facilitating Access Initiative” • Announced 20th 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”

  16. 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

  17. 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

  18. “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”

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