Wales Co-operative Centre

Canolfan Cydweithredol Cymru

Posts Tagged ‘money advice service

Struggling to Make Ends Meet.

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The Wales Co-operative Centre runs a number of projects that promote financial inclusion and that provide advice on money management. These projects are a key part of the Centre’s role in developing and implementing solutions to strengthen communities and promote inclusion in Wales. Jocelle Lovell, who manages one of these financial inclusion projects, blogs about two recent reports on personal money matters…

In the past month we have seen the publication of the ‘Changing Household Budgets’ report by the Money Advice Trust (MAT) and the National Survey for Wales 2012-13.

Whether we look at this from a UK perspective or a local Welsh one, the evidence clearly shows that both in work and workless households people are struggling to keep up with their financial commitments on a regular basis. More typically those affected are aged between 25 – 44 and 45 -64, and live in the social or private rented sectors. As the nature of the debt has shifted, we are seeing more people falling behind with payments such as rent, gas, electric, phone and catalogue bills.

Evidence from the Wales Co-operative Centre’s own work ‘Tackling Homelessness Through Financial Inclusion’, which is funded by the Oak Foundation and Welsh Government, supports the findings of MAT, in as much as tenants in the private rented sector have struggled in the past 12 months to pay one or several of the following bills; rent, utilities and food. Three quarters of the tenants we visited were on pre-payment meters for gas and, or, electric and had borrowed money from various sources including catalogues and door step lenders. The majority of people visited were on low incomes (£1,000 or less per month), and we witnessed households in budget deficits. Where possible we looked to maximise income through programmes such as Welsh Water Assist, Housing Payments,  and the Discretionary Assistance Fund.

There is a clear need for people to seek advice at an early stage, to stop their problems spiralling out of control to the point that they could potentially become homeless. To achieve this both public and third sector partners need to work collaboratively with organisations such as Money Advice Service (MAS), Citizens Advice Bureau (CAB) Step Change Debt Charity to ensure services are widely promoted through the various forms of media. Services also need to be accessible and timely in providing advice and support to those in need. With ongoing budget cuts this can be a big challenge but, we know early intervention offers better value for money than costly crisis intervention.

For people experiencing problems with money, or are just looking for some simple advice and guidance, they can go to our website. It has been developed as a simple tool to help people navigate their way through the maze of financial information available on the internet. It will direct you to relevant advice and support agencies and to helpful tools such as a cut back calculator and a budgeting tool. The site also has pages on work and money. We know that all too often it can be a difficult transition moving from benefits into work, having to manage for longer periods of no money, needing to pay for travel and so on. The Money Made Clear Wales website offers practical tools and advice to help people.


18% of Britons regard themselves as being in ‘serious debt’

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Katija Dew, Programme Director for Financial Inclusion at the Wales Co-operative Centre, reflects on all things borrowing and debt in the light of new research published today by the Money Advice Service.

So, according to the Money Advice Service who launched their ‘Indebted Lives’ report today, that’s almost 9 million people across the UK that can’t pay and feel a ‘heavy burden’ of debt.

For the research, 5000 people across the land were interviewed about money management. The data and findings in the report are both shocking and compelling.

Let’s start at the beginning. What is the difference between credit and debt? In essence, credit is borrowing that is manageable and being repaid. When it can’t be paid back as per the contract, it becomes debt.

Hardly a day goes by without headlines about payday lending, debt and money troubles. But are we taking enough notice of the warnings? It seems that some people are, and others are not. Credit unions report to me a reduction in the number of applications for moderate to large sized loans. Some people are reining in their spending but at same time we hear in the news that a higher proportion of earning, young unmarried men with no children are borrowing from pay day lenders…and then having difficulty repaying.

This is worrying, and it begs the question, what are we storing up for the future?

The mood at the report’s launch was helpfully analytical with a pragmatic debate about possible solutions.

For example, the Resolution Foundation’s analysis of the data helped with my musings about how some people are borrowing more and others are borrowing less. It seems that, since 2012, those with a ‘higher financial net worth’ (ie that own more) are borrowing less. Those with a ‘lower financial net worth’ are borrowing more.

In addition lower income households in debt typically owe many multiples of their income, where higher income households owe a higher value but this is a lower percentage of their income. So, lower income households worry much more about the amount they owe, which will be much more of a struggle to pay off.

This data is going to be extremely valuable and will take some time to wade through.

Whatever the detail, we know that debt is increasing. We know that when people seek help that they need it quickly, and that financial capability is a consistent message that we come back to, time and again.

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