Finance & Debt

Low income families support

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Low income families need more support from the government
By Graham Whitham

At a time of great uncertainly for households up and down the country, GMPA has been supporting calls for the
government to do more to protect families from poverty. This includes adding our support to calls from national
charities, and through campaigns like the End Child Poverty and End Hunger UK.

A number of announcements over the last month or so will be helping some people. The government’s furlough scheme and increase in support through Universal Credit and Working Tax Credit will help. The government has provided extra funding to councils to meet increased demand for support with paying council tax. April also sees the end of the benefits freeze, with benefits uprated by 1.7%.

Although welcome, these measures are unlikely to be enough to stop the pandemic pushing many households into financial hardship, either in the short or long-term. There are additional measures GMPA would like to see, and we will be adding our voice to national campaigns calling for changes which will include:

  • Substantially increasing Child Benefit. This is the quickest and most efficient means of getting extra money into the pockets of families;
  • Ending the two-child limit that restricts benefit payments to the first two children in the household;
  • Scrapping the benefit cap that limits the total amount of support a household can receive through the
    benefit system; and
  • Providing extra funding towards council’s local welfare assistance schemes so that they can meet the extra
    demand for support over the coming weeks and months.


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More financial support is needed for young adults struggling with debt

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By Colin Gallagher, United Utilities

Financial management is an ongoing challenge for most people, but worryingly, far too few under 25s are seeking advice when they fall into debt, a new survey has revealed.

This is the feedback United Utilities heard from the money advice community across the region who attended its Affordability Summit at St George’s Hall in Liverpool.

The event – opened by Joe Anderson, Mayor of Liverpool – attracted debt advice charities, food banks, Credit Unions, Housing Associations and financial services to look at what more can be done to help young adults who are struggling with their finances, as well as continuing to support other people who are struggling with their bills.

Louise Beardmore, customer services and people director at United Utilities, said: “The survey showed that many young people are starting to build up debts soon after they turn 18 and very few seek expert advice on how to manage debt and borrowing.

“We’re currently helping more than 100,000 customers through our financial support schemes and since the last summit in January 2019 we have helped 13,000 people out of debt with their water charges but like others we want to do more. This includes having the right support for those under-25, building up debt now and worrying about money in their first few years of adult life.”

Iona Bain: Financial support for young adults aticle for GM Poverty Action

Iona Bain

Iona Bain, an independent financial writer, speaker, broadcaster and founder of the award-winning Young Money Blog also attended the event to emphasise how organisations could better target and engage young people on money management. She said: “Today, young people are thinking much more about their relationship with money. I have seen an explosion of financial apps, websites and books aimed at my generation since I started my blog 8 years ago. But as well as creating confusion, these resources do not always have younger people’s interests at heart, nor do they really solve the huge problem of financial inclusion.

“Responsible educators need to find a way to cut through the noise and offer balanced, independent and trustworthy advice so we can help those facing a financial crossroads. It’s by no means a given that young people who are starting work or higher education have to sink into intractable debt or start missing crucial bills.”

Louise added: “This is the third Affordability event we have organised. From our point of view, if customers, whatever age, are struggling with water bills, they are likely to be struggling to pay most of their household bills. It can be difficult for a single organisation to make a widespread difference and we believe that a collaborative regional partnership can go way beyond what any one organisation could do alone. We can learn from each other and look for other opportunities.”

Information on all the financial assistance which United Utilities can provide with water bills can be found here.

If you provide debt advice to people struggling with their household bills, please register for the Hardship Hub.  The Hub contains information on more than 500 support schemes provided by 300 organisations.


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Living Without

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Millions across the UK are living without household essentials

a press release from Turn2us, a national charity helping people who are struggling financially.

Turn2us logo for GM Poverty Action articleNew research from national poverty charity Turn2us reveals over two million households are living without essential household appliances such as fridges, freezers, cookers and washing machines.

The #LivingWithout campaign report outlines the scale of appliance poverty across the UK.  It also highlights the financial, physical and emotional consequences experienced by people living without these basic essentials;
especially families and individuals affected by more complex physical and mental needs.

The analysis highlights the true scale of appliance poverty in the UK, with at least 1.9 million people living without a cooker, 900,000 without a fridge, 1.9 million people living without a washing machine and 2.8 million without a freezer.  While the national scale is staggering, certain demographics are considerably more affected than others, such as private renters, the self-employed, single adults and households on incomes below £10,000. Some regions are also worse off, including people living in London, the West Midlands, Yorkshire and Humber and the North East.

Between 2017-2019, Turn2us surveyed over 10,000 service users and uncovered the impact of living without
essential household appliances.

“It is expensive to buy food already cooked, [but we have] limited options at home without a stove and oven”

“My family have concerns over my weight loss, they cook me food to make sure I have eaten”

“I have incontinence because of my epilepsy and I am unable to wash my clothes like I should, I feel so embarrassed”

Tom Lawson Turn2 Us for GM Poverty Action

Thomas Lawson

The research and analysis from Turn2us shows that changes to welfare policy since 2010 has contributed significantly to the increase in appliance poverty.  The abolition of the Social Fund in 2013, which previously provided support for those living without essential household appliances, has specifically been identified as the single biggest erosion of help. Of the 100 grant giving charities Turn2us spoke to as part of this campaign, over 70% identified the abolition of this crisis fund as a turning point. As a result of this, Turn2us is campaigning to develop a new system of Local Welfare Assistance Schemes to adequately replace the Social Fund.

Thomas Lawson, Chief Executive at Turn2us, said: “Household appliances are not luxuries, they are essentials. Everyone deserves the simple right to store their own food, cook their own dinner and wash their own clothes. People who currently live without white goods face huge economic, physical and emotional penalties. We all want to live in a society where these social injustices are no longer tolerated.”

The report includes a series of recommendations including bolstering Local Welfare Assistance schemes, launching a Select Committee inquiry into Local Welfare Assistance schemes, raising awareness of alternatives to high-cost credit  and raising the Local Housing Allowance rate to meet average rents.

If you’re struggling without household appliances, such as white goods, you may be eligible for help. Find out more. The Turn2us website includes a Benefits Calculator to find out what welfare benefits and tax credits you could be entitled to, a Grants Search to find out if you might be eligible for support from almost 2,000 charitable funds, and a range of information and resources to help people struggling to get by.

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Debt Trap

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Ending the Great British Debt Trap

by Stephen Pennells, Jubilee Debt Campaign, Manchester

Last March I shared Jubilee Debt Campaign’s Great British Debt Trap campaign which tackles the continuing debt-poverty crises that unequally impact poor people with insecure incomes.

As the campaign launched, Wonga went into administration and pay-day loans capping is now saving families £150 million every year.   In the past year the Financial Conduct Authority (the FCA), the body that regulates the financial services industry introduced a cap on rent-to-own debt businesses (like Brighthouse) as we were demanding.

Instead of a £400 washing machine costing a potential £1,600 or beyond, the maximum a firm can charge will be capped at £800; still a lot of interest, but establishing the principle is a great step forward, and one that couldn’t have happened without thousands of people taking action. The FCA estimates that the cap could save consumers £22.7 million a year.

But there’s more to do. Updated statistics from the Money Advice Service indicated about one in four facing problems with debt and in Greater Manchester 397,600 adults are classified as ‘over-indebted’.   Manchester Central is the most indebted constituency with 32,300.  Many of these are parents so the impact of choosing between heating and eating will hit thousands of children in the region.

In the past year the FCA finished a big review called the ‘high cost credit review’ – a huge opportunity to make some real changes and get a cap on interest and charges across the board. But they didn’t take it. They didn’t introduce a cap on credit cards, overdrafts loans or doorstep lending. It’s not good enough. That’s why JDC is collecting anonymous stories of debt to present to the government and are calling on it to:

• End rip-off lending by capping interest and charges for loans, credit cards, overdrafts and doorstep lending;
• Launch a government inquiry into why so little action has been taken and to put pressure on the Financial Conduct Authority to act.

JDC End the debt trepphoto of Rev P Davies for GM Poverty Action

The Reverend Patrick Davies

Politicians and leaders need to be encouraged to raise their voices, and reminded to keep on doing so.   With Debt Week 2019 falling during the General Election period, JDC set up an online action which meant hundreds of candidates were lobbied; several locally went out of their way to pledge support.

This campaign continues and JDC will gladly provide materials such as cards and petition forms.  JDC can be contacted via email or call 0207 324 4722.


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North West Hardship Hub

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New service puts debt support at your fingertips

introducing the North West Hardship Hub

Debt advisors across the North West are being encouraged to register for a new online resource putting hundreds of support schemes at their fingertips.

‘The North West Hardship Hub’ brings together financial assistance schemes from across the public and private sector to help the money advice community quickly and easily pinpoint the right support for people who are struggling with their household bills.

Supported by regional water company United Utilities and developed in conjunction with the money advice community, the Hub now contains information on more than 500 schemes from 300 organisations covering sectors such as electricity, gas, telecoms, water, local authorities and housing associations.

Jane Haymes, affordability manager at United Utilities said:  “The idea behind the Hardship Hub came about after we organised an affordability conference in Liverpool back in 2018. Debt advisors who attended the conference said what they really needed was a facility to help them quickly find debt support schemes from all the different providers across the North West without having to trawl all the different companies’ websites.

“A year later, with the support of the debt advisor community, the Hardship Hub was launched and it’s been a great success. The site now contains information on hundreds of schemes and is continuing to grow.”

Once registered, debt advisors can easily search to find what schemes are available in postcode areas so their clients get the support they need.

Said Jane: “The Hub has made it incredibly easy for debt advisors to find the right schemes for their clients. What’s really useful about the site is that the advisors can rate each scheme so that the providers can see whether their scheme is delivering the support it should be. I’d encourage all debt advisors from the North West to give it a go.”

Registration for the Hardship Hub is free, visit the website.


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Great British Debt Trap

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We were recently contacted by Stephen Pennells from the Jubilee Debt Campaign and we invited him to write for the newsletter to tell us more.

Ending the Great British Debt Trap
By Stephen Pennells, Jubilee Debt Campaign, Manchester

There are many causes of household poverty but one of them is the debt trap that faces people who don’t have the ‘Bank of Mum and Dad’ or savings to fall back on and find themselves forced to borrow at the most expensive rates when a crisis occurs.   This leads to another crisis.    Decent and dependable work, credit unions, and responsible debt counselling are needed, but so also are structural changes.

Although Wonga is in administration, they still take payments, while others eagerly pick up their business. Moreover, regulation of credit cards, overdrafts, doorstep lending, rent-to-own and other businesses remains light, both in terms of interest rates and conditions.

People who can’t shop around may pay considerably more for goods when they buy from BrightHouse or are lured by the perceived prospect of savings, into opening interest-charging accounts with high street stores.

Jubilee Debt Campaign, campaigning with others in the ‘End the Debt Trap Campaign’, demands an end to predatory and exploitative lending, a write-off of personal debt due to irresponsible lending and deep structural economic injustice, and changes in economic policy so that people don’t need to rely on borrowing to make ends meet.

Several Manchester councillors and local MPs (Andrew Gwynne, Mike Kane, Afzal Khan and Jeff Smith) have supported the campaign, as has the Dean of Manchester.

We’re calling on the Chancellor to end rip-off lending by capping interest rates and charges for loans, credit cards, overdrafts, rent-to-own and doorstep lending; and set out how the goverment plans to help families who are stuck in the debt trap.

JDC is a small NGO with a dedicated but overworked staff in London.  To change mindsets and break the chains of domestic debt snaring over 18% of Greater Mancunians, the campaign needs you not only to sign, but also to take it to family and friends, workmates, union and party meetings, religious congregations and community centers.  You can join on our website

Politicians and leaders need to be encouraged to raise their voices and reminded to keep on doing so.   JDC will gladly provide materials such as cards and petition forms or help with this and can be contacted by email or on 0207 324 4722.


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Universal Credit

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Universal Credit – action taken, more to do             
By Graham Whitham

Last week the new Secretary of State for Work and Pensions Amber Rudd MP acknowledged that key ways in which Universal Credit operates and functions need to be addressed. The first important announcement was that the two-child limit for Universal Credit payments will not apply to children born before April 2017. Whilst this is a welcome change, it still leaves the two-child limit in place for children born after that date, hurting families with more than two children who are already at greater risk of poverty. Many campaigners are rightly calling for the policy to be abolished altogether.

One of the major concerns about Universal Credit has been the lack of flexibility around the regularity of payments. Some are concerned that monthly payments cause problems for people used to budgeting on a weekly or fortnightly basis. Amber Rudd is looking at how the system can provide more frequent payments to those people who need them. At GMPA we believe the option of more frequent payments should be made available to everyone in receipt of Universal Credit. That way people will be able to choose the option that best meets their budgeting needs and habits.

Other announcements included looking at making is easier for families to manage childcare costs. Action is needed to reduce the complexity of accessing support for childcare and to support parents to meet upfront childcare costs when moving into work. The migration from the legacy benefits system to Universal Credit has placed a huge burden on the government and recipients of support. Amber Rudd said she will look at the migration of people onto Universal Credit to minimise some of the problems this causes for individuals and their families. The ideal would be an automatic migration of people from the legacy system to Universal Credit (rather than having to put in a new claim for support), but we are yet to see an indication from the Government that they will follow this course of action.

Graham W UK poverty strategy article for GM Poverty Action

Graham Whitham

The announcements are welcome but tentative steps towards addressing some of the concerning elements of Universal Credit. In Greater Manchester, many individuals and organisations are fully aware of the challenges created by the implementation and operation of this new social security system. At GMPA we are working with others to understand what can be done locally to improve the way the social security system operates. Please get in touch if you would like to discuss this further.


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Hidden young people

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New research explores why young unemployed people are turning their backs on the benefit system
by Dr Katy Jones, University of Salford

There is growing concern about so-called ‘hidden young people’ – those young people who are neither in employment, education or training, nor claiming the benefits they are entitled to. There are approximately 21,890 hidden young people in Greater Manchester. Recognising the issue, Greater Manchester Combined Authority (GMCA), in its strategy ‘Our People, Our Place’, commits to ‘ensuring that fewer young people are ‘hidden’ from the essential support and services they need’. However, the evidence base relating to this group is incredibly limited – this is the case both locally and nationally.

In response to this, and as part of the Salford Anti-Poverty Taskforce, Salford City Council commissioned researchers at the University of Salford to undertake a qualitative study exploring the experiences of ‘hidden young people’. From interviews with 14 young people with experience of being both ‘not in employment, education or training’ and ‘Hidden’, and a series of focus groups involving 25 stakeholders from across the city, this research has uncovered some of the stories behind the statistics – and a range of reasons why many young people are shunning the benefits system.

The research shows that a lack of knowledge about benefit entitlements is widespread. As one young woman explained:

            “I didn’t know that I could claim… until I was told by the people from [accommodation provider]… If not, I
wouldn’t have known. You hardly hear it from anywhere, these things.”

Others are deterred by the ‘stigma’ associated with the Jobcentre. In the words of one young person:

            “Like if someone said to me, ‘Where do you get your money from?’ I think I’d be a bit embarrassed to tell

However for others, an increasingly ‘conditional’ welfare system, combined with poor experiences of the Jobcentre, made them reluctant to engage with the benefits system. As one stakeholder explained:

            “Why would you continue to engage with a system that treats you so overtly badly and has all the power in
that situation? You would just withdraw from it.”

Negative perceptions of Jobcentre Plus services were widespread amongst both young people and practitioners involved in the research.

Whether or not young people need or want to claim benefits, not engaging with the social security system excludes them from mainstream support and service provision – as most youth unemployment interventions are routed through the Jobcentre and related contracted providers.

Katy Jones Hidden young people article for GM Poverty Action

Dr Katy Jones

The report makes a series of recommendations for policy and practice, some of which apply at a Greater Manchester level – namely – that the GMCA should continue to monitor the issue, updating and measuring progress in meeting its strategic commitment against the estimated number of hidden young people in the sub-region (currently 21,890). Furthermore, in line with its commitment in the Greater Manchester strategy, we call on the GMCA to outline the steps it is taking to ensure effective support is provided to all hidden young people across Greater Manchester.

The report was launched at the University of Salford on 31st October, with a presentation from lead author Dr Katy Jones, followed by a response from Salford City Mayor Paul Dennett, and representatives from Salford City Council, Greater Manchester Combined Authority and the Greater Manchester Talent Match Youth Panel. A copy of the report can be accessed here.


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Cap on cost of rent-to-own

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The End Child Poverty coalition has welcomed the Financial Conduct Authority’s announcement that it will consider a cap on the total cost of goods bought through rent-to-own.

Anna Feuchtwang, Chair of End Child Poverty and Chief Executive of the National Children’s Bureau, said “We welcome the FCA’s announcement. It is the poorest families that pay the highest prices for essential household items. By considering a cap on the total cost of rent-to-own goods, the FCA has recognised the need to protect households who incur real financial hardship simply through purchasing essential items such as fridges

“As child poverty increases across the UK it is imperative that regulators and businesses play their part to ensure families are not forced to service high levels of debt at the expense of putting food on the table, or heating their home and we urge the FCA, at the end of their consultation, to impose a cap.”

The End Child Poverty coalition is calling for a cap of not more than double the total cost of rent-to-own goods and welcomes the move to consider banning the sale of warranties at the time of purchase.  In their report Feeling the Pinch: Furnishing your home with rent-to-own published in November 2017, the coalition found that rent-to-own customers have the lowest incomes of all high-cost credit customers and are likely to be in arrears for other households bills. Unable to afford to buy goods outright, low income households often have little choice than to buy essential goods through rent-to-own.

The rise in families turning to high-cost credit has come as the Government has frozen children’s benefits. End Child Poverty is calling on the Government to end the freeze and create a single interest free fund for anyone eligible for Universal Credit so that low income families can access an alternative to high-cost credit.

GMPA is a member of End Child Poverty.


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Scams Awareness

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Scams Awareness Month

by Ali Craythorne

June marks Scams Awareness Month, an annual Citizens Advice campaign where we raise awareness of how to spot, avoid and report scams. Citizens Advice Manchester we will be working in partnership with Trading Standards, campaigning in the community and delivering a number of training sessions to help the public to become scam-aware.

According to the Local Government Association fraud is currently the most common form of crime. In 2017, there were 3.6 million cases reported in England and Wales, which equated to around £10 billion lost in this area alone. This is likely to be much higher as an astonishing 95% of scams go unreported.

Due to the economic climate and accessibility of information, scammers are targeting people more than ever. The breadth and range of this type of crime is huge. Action Fraud identifies over 100 different types of fraud and this figure will grow as techniques evolve and become more sophisticated.

Scams pose a real risk to financial security, and many victims get into debt and experience poverty as a result of being scammed. At Citizens Advice we receive over 3,000 contacts (face to face, email, webchat, telephone) every quarter from people who have been targeted by scams. We also receive reports from people that are unable to pay for essentials such as utilities and food as a consequence of being scammed. Some of the most common types include emails and texts purporting to be from banks and financial agencies aiming to extract passwords and login details. We see lots of fake lottery and inheritance emails that require you to pay fees before your windfall is ‘released’; fake adverts and look alike websites offering non existent ‘designer goods’ at bargain prices; and rogue traders who systematically target the most vulnerable people in society with bogus and often unnecessary repairs. Most worryingly, we now receive reports that people are receiving calls claiming to come from Citizens Advice and trying to take bank details, supposedly to resolve a financial  issue.

Craythorne CAB scams article for GM Poverty Action

Ali Craythorne

Scammers succeed because they prey on human needs and desires. They are designed to provoke an emotional response whether this be fear, excitement, lust or greed. Whilst anyone can be a victim of a scam, research conducted by Citizens Advice in 2017 indicates that older people, people with lower levels of education and those on low incomes are less likely to recognise a scam. In 2007, Trading Standards warned that there were approximately 300,000 people held on ‘scam lists’ in the UK and that they expected this to rise to 1 million by 2019.

If you suspect you may be the victim of a scam, we would always advise that you report this to Action Fraud, or call our Consumer Helpline on 03454 04 05 06 if you need further support.

If you would like to attend our training on how to become more scam aware please book on this link

Barry is an elderly man with chronic health problems. A scammer knocked on his door explaining that Barry’s roof needed urgent repairs. The scammer charged him £2,000 for the repairs and never returned. Barry emptied his bank account and borrowed £500 from a friend. He was left unable to pay his utility bills and has now got into arrears.


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