Finance & Debt

Cash Perks

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Innovative solution getting cash to hardship grant beneficiaries

By Gareth Evans, Director, GRE Consulting

The pandemic has focused attention on the importance of local safety-nets in providing crisis grants for struggling households. Many councils have redesigned or reinstated their Local Welfare Assistance schemes to give emergency support for food, fuel and other essential household goods and items.

The recent GMPA report, which examines such schemes across the region, backs the growing calls for a cash-first approach to these hardship grants. It is shown to maximise dignity, autonomy, choice and ultimately impact, compared to the provision of food parcels or vouchers.

A new payment solution, Cash Perks is helping Councils, housing associations and local/national charities overcome the challenges of cash disbursement to those in financial difficulties – especially where clients might not have bank accounts but more commonly are overdrawn.

Gareth Evans, a leading researcher and anti-poverty campaigner who launched Cash Perks explains: “The idea came about when we were helping design an emergency food and fuel scheme for one of the country’s largest housing associations. We recognised the limitations of other payment options to get cash immediately to those that need it, so went out and created a solution.”

ATM photo for cash first for GM Poverty ActionThe technology enables organisations to securely send payments between £10 and £500 to their beneficiaries by SMS text message. Recipients can instantly collect their allocated funds 24/7 at over 17,000 ATMs nationally – all without the need for a card or bank account.

One local authority that has already embraced the facility is London Borough of Barking and Dagenham, which originally piloted it to send hardship payments for those without bank accounts. But following its success, the Council has just used it to disburse almost £250,000 of its Covid Winter Grant Scheme allocation in individual payments to its approved households. “It’s really straight forward and it’s a fast, efficient, flexible system that supports us to implement frequently announced new government initiatives,” explains Donna Radley, Head of Benefits. The Council’s Children’s Services directorate has now adopted it to replace the myriad of petty-cash payments that it makes to clients.

Anthony, one of the recipients of the Councils support explained the difference the emergency cash payments had made, “This has literally saved my life. I have had such a bad couple of years and this went some way to helping me eat properly and getting myself back to myself after the death of my son in 2019 and losing my job and then lockdown. I can’t thank you enough.”

With no setup costs or monthly charges, just a fixed fee per transaction based on the amount sent and usage volumes, it enables organisations of all sizes to access the innovative technology.

Wimbledon Guild, a small benevolent charity that operates in South London has used Cash Perks to continue offering its small emergency grants throughout Covid despite its offices being closed. Vanessa Robins, the charity’s Welfare Manager says, “It is a fast and convenient way to get cash urgently out to clients at little cost to the charity, especially for those without access to a bank account or who have overdrafts where transferred cash would be swallowed up.  It reduces admin time and fewer staff need to be involved in the transactions, although there is a strong audit trail.”

Find out more here.

 

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Childcare costs

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Childcare costs rise as providers struggle to remain sustainable during the pandemic

By Hannah May Parlett, Coram Family and Childcare

Britain’s parents are paying 4% more for childcare for children under two, and 5% more for children aged two than they were one year ago, according to the country’s most comprehensive annual survey of childcare costs. Coram Family and Childcare’s 21st annual Childcare Survey finds that parents have faced childcare costs rising well ahead of inflation and are now paying an average of £138 per week – over £7,000 per year – for a part-time nursery place for a child under two (in the North West the figure is £126.43).

Childcare providers are struggling to remain sustainable during the crisis, with 39% of local authorities in England seeing providers in their area raise their prices and 32% reporting that some providers have reduced the number of free early education entitlement places they offer. Furthermore, 30% have seen providers increase the number of children looked after by each staff member.

Despite over a third (35%) of local authorities in England reporting a rise in the number of providers in their area permanently closing in the last year, the majority have not yet seen an increase in shortages of childcare. Over two-thirds (68%) of local authorities in England reported having enough childcare available to meet demand for parents working full time, compared to 56% last year. However this is most likely to be due to decreased demand from families during the pandemic, rather than increases in the supply of childcare, and it is yet to be seen whether there will still be enough childcare places if, and when demand returns to pre-pandemic levels.

In addition, availability of childcare for certain groups is little improved on last year, with less than one in four local areas in England reporting enough childcare for 12 to 14 year olds (13%), parents working atypical hours (16%) and disabled children (25%). These shortages for disabled children exist despite the fact that fewer disabled children are using childcare – a third (31%) of local areas thought that fewer children with special educational needs and/or disabilities (SEND) were using childcare than last year.

Coram logo for GM Poverty ActionMegan Jarvie, Head of Coram Family and Childcare, said: “The pandemic has reminded us all of the vital importance of childcare, in enabling parents to work, boosting children’s learning and narrowing the gap between disadvantaged children and their peers. However the crisis has also exacerbated the issues that exist in the sector. For too many families the system simply isn’t working, and they are left struggling to make work pay after childcare costs or are forced out of the workplace entirely.

“There remains a risk that many providers could close, leaving more families struggling to find the childcare that they need, or that costs could further increase, at a time when family finances have already been stretched by the pandemic. Financial support from the Government has helped childcare providers to stay afloat, but we don’t know what the effects will be when this support ends. We’re calling for the Government to take urgent steps to improve the system now and in the longer-term so that every child can access the high-quality childcare that supports their early development.”

The Childcare Survey 2021 sets out actions that governments can take in the short-term to fix urgent problems in the system:

•  Launch a funding review for the free early education entitlements to make sure that funding levels are sufficient to support the delivery of high-quality education and care, including, but not limited to, issues resulting from Covid-19.

•  Reform Universal Credit so it does not lock parents out of work, by increasing the maximum amount of childcare costs paid under Universal Credit and move to upfront payments for childcare.

•  Extend the 30 hours free childcare provision for three and four year olds in England and Wales to families where parents are in training, to help boost their employment opportunities.

•  Double the early years pupil premium, to boost outcomes for the most disadvantaged children.

•  Re-allocate any underspend budget for Tax-Free Childcare to other parts of the childcare system – prioritising the most disadvantaged children.

For a copy of the full report please contact Emma Lamberton, Communications Manager, Coram.

 

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Strengthening local welfare provision

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Next steps

By Graham Whitham

In December, GMPA launched our Strengthening the role of local welfare assistance report. The report identifies good practice and recommendations from across the country and considers how these can be applied to local welfare assistance schemes here in Greater Manchester.

Local welfare assistance schemes are an important means through which local authorities can respond to the needs of residents facing a financial crisis. Relatively small interventions delivered through these schemes can help meet a person’s immediate needs and prevent them from falling deeper into hardship. However, national research has found that there’s often a lack of awareness of schemes, that they are poorly advertised and difficult to access.

In Greater Manchester, where all local councils have schemes in place, there is some existing good practice and a real opportunity to strengthen support in each of our boroughs. Taking the recommendations detailed in the report, GMPA has developed a checklist for local authorities and their partners to use to assess their schemes and understand what further improvements could be made. Importantly, at a time when local authority finances are coming under even greater pressure, most of the recommendations come at no extra cost.

We are pleased with the engagement we’ve had on the report to date. This month we held events for elected members, council officers and other stakeholders from across GM, and we’ll continue to work with councils and their partners over the course of this year.

Of particular relevance as we (hopefully) begin to recover from the pandemic, is the focus in the report on taking a ‘cash first’ approach to supporting people. This means that the default way in which someone facing hardship is supported is through a monetary payment rather than in-kind support such as a fuel voucher or food parcel.

Local welfare assistance schemes represent an obvious opportunity for local authorities to adopt this approach as a key role of schemes is to support residents with essential living costs for those in financial crisis, such as buying food or heating their home. Whilst most of the schemes in Greater Manchester offer this support, it is usually in the form of vouchers.

There has been a range of research highlighting the benefits of cash payments over any other form of support for those in financial crisis due to its:

a) Flexibility, choice, speed and convenience – vouchers have to be used with certain companies or certain locations or for certain products; cash can be used anywhere and if issued electronically, is available immediately. Vouchers may mean someone having to travel a distance to buy food, costing them money and time, when they could have used their local shop if they had access to cash, benefiting the local economy. There is a much greater risk that vouchers won’t be used compared to money.

b) Preservation of dignity – having to use vouchers can be stigmatising and may reduce access to the support that residents desperately need.

c) Administrative efficiency (when processed electronically) – once an electronic system is set up to pay cash it can be processed quickly and remotely, without the need for face-to-face visits. This approach removes the need to make arrangements with third parties (e.g. voucher providers) further reducing administrative pressures.

Graham Whitham, CEO GMPA for GM Poverty Action

Graham Whitham, CEO GMPA

Adoption of a ‘cash first’ approach by local welfare assistance schemes across Greater Manchester would help contribute to addressing the atomisation of poverty that we’ve seen over the last ten years. You can read more about the importance of this approach in our ‘Cash first’ briefing and in the Strengthening the role of local welfare assistance report.

 

 

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Manchester Credit Union reaches a milestone

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Press release

Savings and loans provider Manchester Credit Union has reached a milestone of £12.5million savings by its Mancunian members as it celebrates its 30th anniversary.

Starting up as Beswick and Openshaw Credit Union in 1991, it evolved into Manchester Credit Union and now serves 32,000 members across the city, as well as Bury, Rochdale, Tameside, Trafford, and the High Peak.

The credit union, a financial co-operative that is owned by its members, has seen demand for their services rise since the pandemic hit, as the city’s residents turn to local, ethical and affordable loans and savings products.

Chief executive Christine Moore said “When I first joined in 2000 there were 103 members and I was the first, and only, paid member of staff.

“Today we have more than 32,000 members and all day-to-day transactions are handled by a fantastic team of 23 staff. We estimate that we save local people in excess of £5million in loan interest each year, compared to doorstep and other high-cost lenders. When they borrow from us, we actively encourage all our members to save with us by transferring a small amount of their loan repayments into a savings account to help them build up a pot of savings for a rainy day.

Manchester Credit Union for GM Poverty Action

Christine Moore

“More and more Mancunians are turning to us as they look for an organisation that really cares about them and their city – and it keeps money in Manchester, rather than in the pockets of external shareholders.

“We would not be where we are today without the unfailing support and hard work of the staff, directors, and most importantly the volunteers from all the pioneering credit unions who are now part of the Manchester Credit Union family.”

For more information about Manchester Credit Union please visit their website

 

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Gambling related harm

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New financial data highlights the broader impact

By Jo Evans, Gambling Harm Reduction – Programme Manager, Greater Manchester Combined Authority

Earlier this month a ground-breaking new report was published using data from 6.5million anonymised bank accounts to demonstrate the impact of gambling on customers. For the first time this study documented the wider financial impact of relatively low-level gambling. For example, a 10% increase in the amount spent on gambling is associated with a 52% increase in payday loan take-up, an 81% increase in missing a loan repayment and 98% increase in missing mortgage repayments. Where spend on gambling amounts to 2 – 4% of an individual’s income, harms become more severe. With no limits on the amount that can be gambled in a single session, gambling harms can happen very quickly, but recovery can take a long time.

Gambling related harms are not just financial, and this study showed that people who gamble are less likely to spend money on their own wellbeing and had an increased mortality rate. Anyone who gambles is at risk of harm. In Greater Manchester it is estimated that there are approximately 147,000 at risk or harmful gamblers, although this is likely to understate the true extent of gambling related harm as for every person directly affected, up to 6 – 10 others may also be impacted.

Gambling is often described as a hidden harm, but many of those experiencing harm may already be in contact with existing services, where the issue of gambling may be the root cause of wider problems such as domestic abuse, mental health, family breakdown and financial difficulty. This represents a significant opportunity to improve the identification of problem gambling and access to appropriate treatment and support.

GMCA is developing an ambitious programme to prevent and reduce gambling related harm in Greater
Manchester, one of the first areas in the country to do so. We all have a part to play in this.

Educate ourselves and our teams about gambling related harm and build skills to identify, signpost and support people in our communities who may be experiencing harm – visit the GMHSCP website for details of resources and available treatment options.

Support our call on Government to take a proactive stance to regulation in response to its review of the Gambling Act, in particular in restricting the way that gambling products are promoted and advertised
(e.g. sponsorship in sport), introducing stake and deposit limits on online products and giving communities a greater say over the premises that are licensed in their neighbourhoods.

If you have a story to tell about how gambling has affected you, or the people you work with, please get in touch as we can use this to build our understanding of gambling related harm in Greater Manchester, and develop better targeted interventions to prevent and reduce harm.

To get involved, or for further details about this programme, please contact Jo Evans, Gambling Related Harm Programme Manager.

 

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Debt and its impact on health

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Responding to the debt crisis and its impact on health

by Simon Watts, Public Health Registrar on placement with GMPA

Turn2us logo for GM Poverty Action article on debtNew research based on a survey of 2,500 adults was published by Turn2Us last week revealing the levels of indebtedness which are now facing many residents across the UK:

•  One in three families are getting into debt as a result of the pandemic;

•  One in five people are now ‘always or most of the time’ running out of money before pay day; pre-Covid this number was closer to one in nine;

•  Younger age groups, those with a disability or those from a Black or Asian background are all more likely to run out of money before payday than other groups;

•  Of those surveyed who have accessed debt since March, nearly two thirds could only manage for less than a week if they lost their primary income source.

This shows how little financial resilience many people have. As a result, multiple sources of debt, which at some point must be repaid, have become increasingly relied upon.

The Office for National Statistics find that those in the most income deprived areas are likely to rely on debt more, and further analysis suggests average unsecured debt level is now a staggering £15,000 per household. This is less surprising when you consider the high interest rates associated with payday loans, which can exceed 1500% APR and that those lower income groups, who can’t access affordable credit options, pay an average of £527 more when they buy a household appliance. These are examples of the poverty premium, whereby if you earn less, your costs are higher.

And debt is not just a Covid related problem. The insolvency rate before Covid across most local authority areas in Greater Manchester was at or above the peak following the 2008 recession; we entered the pandemic in a bad position in terms of debt.

The impact of problematic debt is wide, leading to relationship loss, loss of your home, inability to get a home, or a phone contract. The legacy of having debt problems, even once the debt has been written off or repaid, is felt for a long time. The health impact of debt can be severe, with a review of the evidence on debt and health finding that debt was associated with depression and other mental illnesses and in some cases suicide, as well as physical health problems. Given that certain groups of the population (identified above) experience the biggest problems with debt, these negative health impacts are not evenly distributed and contribute to widening health inequalities between groups.

UK debt levels are a public health crisis. The Turn2us research makes several recommendations, including increasing funding for Local Welfare Assistance Schemes (LWAS). GMPA very much support this suggestion, as well as other recommendations in the report including reducing waiting time for Universal Credit (UC) and maintaining the £20 UC uplift, but we would also support further action.

Forthcoming GMPA research into LWAS highlights the excellent support offered by debt advice and money management teams across Greater Manchester; but these services are getting busier. A focus on prevention is needed that seeks to reduce the number of people entering debt crisis, but also ensures those whose health is suffering as a result of debt can access the right support. This isn’t just about helping those already in financial crisis, though that is important. It is also about lower income groups not always able to access affordable credit, it’s about responsible lending, illegal money lending, discussing the dangers of debt with young people and much, much more. And the approach needs to be consistent and coordinated across the city region, so that where residents live doesn’t determine their likelihood of getting into problematic debt.

Simon Watts for GM Poverty Action article on debt

Simon Watts

If you, or someone you know, is struggling with debt and money management, support is available from your local authority and other partner organisations. This website provides a useful directory of the support available, and you can find a range of information and advice services listed on the Maps of Support Services page of GMPA’s website.

 

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Sound Pound

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GM Community Credit Unions unite to unveil £15m support in Covid recovery plan

Press release from the Sound Pound Campaign

Eight Community Credit Unions have joined together to launch a Covid-19 recovery plan that will offer hope and £15m in financial support to millions of people across Greater Manchester.

The consortium, known as Sound Pound, wants to show communities across the city region that there is light at the end of the tunnel and that their local community credit union is there to support them at this time of uncertainty and financial hardship.

David Batten, chief executive of Hoot Credit Union in Bolton and chair of the Sound Pound consortium, said: “We have come together to launch this joint recovery plan and to pool the resources and financial support we have available. Together, we have a very clear objective to rebuild communities, support people and lend responsibly. And, by doing this, it will also provide a vital boost to the local economy.

“We want to encourage anyone who is struggling financially due to the impact of Covid to speak to their community credit union about their borrowing needs. By supporting local people and offering them credit, it will increase spending and keep our economy moving forward. It’s a cycle and, if we work together, we can keep going.”

The Sound Pound consortium is made up of Manchester Credit Union, South Manchester Credit Union, Stockport Credit Union, Cash Box Credit Union (Tameside), Unify Credit Union (Wigan), Hoot Credit Union (Bolton), Salford Credit Union and Oldham Credit Union. All eight have signed up to the initiative in order to provide support to their local communities.

David continued: “Credit Unions are ethical, not-for-profit financial organisations. They are there to put people first and to help anyone who needs financial support. Credit unions also help people to save for the future and become financially independent.”

Angela Fishwick, chief executive of Unify Credit Union in Wigan, said: “Our communities are really struggling right now. Many who never experienced debt or hardship before, are facing a very uncertain future and we can help. Because of the unique way that credit unions operate, we are able to lend money to help them with their day to day living costs and even help them save for a more secure future.”

Nathan Walters, member of Cash Box Credit Union in Tameside, said: “I first joined Cash Box because I wanted to start saving but they really came to my rescue recently when I needed urgent financial support. They are so friendly and helpful and because they are a part of my community they really understand me and my circumstances.”

David added: “Credit unions offer support to local people whatever their needs are. Whether they are a single parent struggling to make ends meet, are looking for a deposit for their first home or need some help with managing their finances and putting some money away. Credit unions are also there to support local businesses and we offer a range of support services to help them with the increasing pressures they are currently experiencing.

“Our Sound Pound recovery plan has been created to rebuild communities, support people and lend responsibly and it will play a crucial role in driving our local economy forward, helping all of us to build back better from the impacts being felt by our communities across Greater Manchester due to the Covid-19 pandemic.”

To find out more about the support offered by your local community credit union, visit the website

Soundpound logos for GM Poverty Action

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Welfare at a (social) distance

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Welfare at a (Social) Distance: Accessing social security and employment support during the COVID-19 crisis and its aftermath

By Lisa Scullion, University of Salford; Daniel Edmiston, University of Leeds; and Kate Summers, London School of Economics.

The Sustainable Housing & Urban Studies Unit (SHUSU) at the University of Salford, working with the universities of Leeds, Kent and the London School of Economics, is leading a large-scale national research project to understand how the working-age benefits system responds to the coronavirus crisis. Funded by the Economic and Social Research Council as part of UK Research and Innovation’s rapid response to COVID-19, this project will rapidly produce large-scale evidence to inform policymaking in the coming months.

As newsletter readers will know, the benefits system is crucial to supporting people during, and after, the COVID-19 crisis. With a growing number of new claimants, it faces two challenges. Firstly, to ensure people quickly get the money they need. And afterwards, that people are helped to quickly return to work or supported further if unable to work. This project will provide vital information on how we are meeting these challenges and where the system is struggling in order to help develop rapid solutions.

The project has three main components. We are conducting an online survey of 8,000 new and existing claimants, to provide a nationally representative picture of what is happening. Second, we are conducting four local area case studies in Leeds, Newham, Salford and Thanet, to identify how local support systems, including local authorities, third sector providers, and others, support claimants. Third, we are interviewing 80 claimants twice over the next year. These in-depth interviews will help us understand the details of claimants’ experiences.

This project is particularly important because of the ongoing and new challenges that the benefit system is facing. The coronavirus crisis has created a group of ‘new’ claimants, who might not have prior experience of the social security system: we need to understand how their experiences compare to those of existing claimants. Specifically, we need understand if support and income is reaching all claimants in a timely way, when the wave of new applications has put higher levels of strain on DWP processes. COVID-19 has also accelerated the shift to a digitalised benefits system – navigating this ‘virtual’ system often depends on in-person help for some claimants (from e.g. advice agencies) and the extent to which claimants can access support remotely is unknown. Later, claimants will need support to quickly return to work, while those who remain out of work will need ongoing
security.

Can you help us?

We are looking to speak to current benefit recipients from across England about their experiences. If you can help put us in touch with anyone currently in receipt of Universal Credit, JSA, ESA, or Tax Credits we would be grateful to hear from you. Interviews are treated confidentially and participants receive a voucher as a thank them for their time.

We would also like to hear from organisations in the Salford area who are currently supporting benefit claimants and are able to share their experiences of providing support during this time.

For further information about the project, or if you would like to be added to our project dissemination list to receive updates from the project, please contact:

Professor Lisa Scullion (University of Salford)
Dr Daniel Edmiston (University of Leeds)
Dr Kate Summers (London School of Economics)Welfare at a distance article logos for GM Poverty Action

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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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