Improving financial inclusion and capability in social housing

Transcription

1 Improving financial inclusion and capability in social housing Supported by

2 Chartered Institute of Housing (CIH) CIH is the professional body for people involved in housing and communities. It is a registered charity and not-for-profit organisation. CIH have a diverse and growing membership of over 22,000 people both in the public and private sectors living and working in over 20 countries on five continents across the world. They exist to maximise the contribution that housing professionals make to the wellbeing of communities. The Money Advice Service The Money Advice Service is here to help everyone understand and manage their money better. We give clear, unbiased money advice to help people make informed choices. We believe that the right money advice can make a difference to people s lives. And when people take steps to manage their money better, they can live better too. We plan to make a real difference to people s behaviour and, as a result, to society. Our advice and information is available online, over the phone and face to face. Our new online health check, coming mid-2011, will give people a personal action plan to help with their money must-do s. We also provide tailored money advice to help people make choices throughout their lives, whatever their circumstances. We provide advice for young people, new parents, people in the workplace, people facing redundancy, those approaching retirement and people going through divorce or separation. We work with partners from a wide range of sectors, industries and government to find innovative ways to make money matters and financial choices clearer for everyone and help shape policy. And as part of this work, influence the financial services industry and help set the regulatory and public policy agendas. Our partnerships help reach those who need our help the most, such as those who find themselves excluded from the financial system. We have worked with the not-for-profit sector to reach those people who may be less able to manage their money and who often turn to trusted charities or community groups for help. This has seen us work with key organisations, funding projects and producing resources in social housing, mental health, for offenders, for people with learning disabilities and those with autism, and to increase financial inclusion. The Money Advice Service is independent. It was set up by government and is paid for by the financial services industry. Barclays Barclays recognise the important role that it has to play in adding value to the economy and to society as a whole. Barclays are investing in projects that build financial inclusion, financial capability and support enterprise. A significant focus of this work is on supporting young adults, particularly the most vulnerable, to effectively manage their finances. Making good financial decisions is an essential life skill and supporting young people to build their financial knowledge and confidence can help ensure that they are empowered to reach their goals. Through the flagship UK community programme, Barclays Money Skills, Barclays are investing 15m over three years to help one million people build the skills, knowledge and confidence they need to manage their money more effectively. Barclays are also contributing time, energy and resources to make sure Barclays Money Skills makes a long term positive difference for society. Barclays have worked with highly respected community organisations to develop a comprehensive set of workshop resources and tools. Specific resources have been developed to meet the needs of a range of different user groups, including young adults, returning servicemen and women, those at risk of homelessness, ex-offenders, older people and school children. These resources are made available free of charge to both individuals and community organisations across the UK. Barclays supports consumers who may not have previously held a bank account with their Cash Card account. They are one of only two banks offering a basic bank account to undischarged bankrupts. Particular thanks go to: Hillcrest Housing Association, Knowsley Housing Trust, Newlon Fusion, Raise Benefits Advice Service, Rhondda Housing Association, Stockport Homes and Wrekin Housing Trust for their help with this publication. Whilst all reasonable care and attention has been taken in compiling this publication, the authors and the publishers regret that they cannot ensure responsibility for any error or omission that it contains. All rights reserved. No part of the publication may be reproduced, stored in a retrieval system or transported in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Chartered Institute of Housing April 2011 Registered charity no: /R ISBN: Code: 649 Photographs by: Libby Welch/Photofusion (cover, top right); all others by istockphoto.com 2

3 Contents Foreword 4 1. The background 5 Why are housing providers interested in increasing tenants financial awareness? 5 Evidence from the sector 6 Ongoing challenges for social housing landlords 6 2. The response 8 A partnership approach to reducing financial exclusion in social housing 8 The project s achievements 9 Development of positive practice 9 Lessons learned from the Financial Inclusion Advisor project 10 Ongoing work Case studies 12 Helping new tenants to sustain their tenancies 12 Promoting a savings culture a match savings scheme 13 Referring tenants to the Money Advice Service 15 Helping young people to develop their money skills 17 Making money work supporting tenants to be financially ready for employment 19 Working in partnership to combat loan sharks 20 Promoting and increasing access to low-cost tenant contents insurance 22 Further information 24 Appendix: Outputs from the Financial Inclusion Advisor project 26 3

4 Foreword How well people manage money makes a tremendous difference to their lives, no matter how much or little they have. In these challenging economic times, being able to manage money well is a skill we all need, whatever our circumstances. This is why initiatives such as our project with the Money Advice Service and Barclays are so important. When people take steps to manage money better, they can live better too. Tenants armed with money management skills and advice are less likely to fall into financial difficulty. Landlords in turn are likely to see lower rent arrears and more tenancies sustained. These are compelling benefits in themselves, but research also finds that being more savvy with money is linked to greater wellbeing, and suffering less anxiety and depression. Our work over the past two years has been generously funded and supported by the Money Advice Service and Barclays. This has provided two Financial Inclusion Advisors to help over 250 housing organisations help thousands of residents affected by the economic downturn. The programme has built a strong support network of housing professionals and generated a wealth of good practice experience in helping tenants manage their money better and benefit from financial inclusion. In this report we share with you the lessons we have learned in developing this work, and some key case studies from the project. You will also find contact details for organisations that can help your tenants with free advice. From mid-2011 this will include a new online health check from the Money Advice Service. As you read this report you will see that there is compelling evidence to incorporate financial inclusion and capability support within your own day to day housing management operations. To help you, the report provides guidance on what you could consider when planning this work, and shares tested examples of practice that you could adopt as part of this provision. Contact details are given at the end of each case study to obtain more information and help you decide how you can adopt or adapt these approaches for yourselves. This report comes at an important time for financial inclusion in the housing sector as the Money Advice Service is rolled out nationally. We hope that you will build on existing successes in promoting financial inclusion, and work with us in helping to make good money management a reality for everyone. Sarah Webb Chief Executive Chartered Institute of Housing 4

5 1. The background Why are housing providers interested in increasing tenants financial awareness? Four million households live in social housing provided by local authorities or housing associations. While many of these householders are in employment, there is nevertheless a strong link between being a social housing tenant and experiencing financial exclusion and benefit dependence. For example: 39% of tenants are of working age and claiming either Jobseeker s Allowance or Employment and Support Allowance 33% of tenants are retired 62% of tenants claim housing benefit, paid to those on benefits or working but on a low-income 15% of unemployed households do not have a transactional bank account, contrasting with 2% of those in full-time work 72% of unemployed households have no savings account compared to 31% of those in full-time work During the current period of higher unemployment, reduced job vacancies and cuts in welfare benefits, helping tenants to manage their finances and cope with more restricted budgets is becoming increasingly important both for the households themselves and for social landlords to avoid increased levels of rent arrears and failed tenancies. Financial hardship is likely to increase the demand for debt counselling services. At the same time the income streams of housing providers are less predictable, potentially resulting in less funding for new schemes, such as those tackling financial inclusion and worklessness. So it is vital that such work is as cost-effective as possible. 5

6 Evidence from the sector In June 2009 CIH published the findings of a baseline survey. It was the first cross-sector UK-wide survey of financial inclusion in housing and was completed by nearly 900 CIH members and housing organisations. It demonstrated concern about financial inclusion issues and showed how the sector had responded: 84% of respondents said that there had been an increase in the demand for debt advice and counselling 43% of respondents had a financial inclusion strategy, and a further 22% said that their strategy was in development 24% of respondents assisted with access to banking services 49% of respondents said that resources were the main barrier in developing and delivering financial inclusion initiatives Debt prevention and early intervention was the highest priority for providers CIH plans to publish a follow-on survey in late spring to establish which initiatives are priorities for housing organisations, what has changed since the first survey and the impact that the work of the Department for Work and Pensions housing champions and the Financial Inclusion Advisors project reported here have had on the sector. Ongoing challenges for social housing landlords The challenges faced by the sector are increasing. Here are some examples: Immediate changes to the benefit system Since June 2010 the government has introduced a range of changes to the benefit system. These included changes to the way local housing allowance is calculated, increases in levels of non-dependant deductions and a cap on household benefits of 26,000 per year. It was estimated that more than half a million tenants in all sectors would face benefit cuts of 10 per week or more as a result. Although the full range of cuts could be revised before they are implemented over the next two years, the effects could be dramatic. Introduction of universal credit The long-term plan to introduce a universal credit reducing the current range of benefits to a single payment will have major implications for claimants, the social housing sector, and advice and support services. Such a major reform is likely to increase the demand for advice. 6

7 Increased demand for debt advice During the economic downturn, there has already been an increase in demand for benefit advice and support in managing finances. The emphasis on making work pay and the proposal to integrate in work and out of work benefits will bring a greater call for advice on coping financially with the transition into work. Access to basic banking Increasing the take-up of basic bank accounts, and helping people develop the skills to manage them effectively, continue to be key parts of financial inclusion work. Having a bank account makes it easier to access employment, and can lead to cheaper household bills due to discounts for direct debit. The need to promote basic accounts and encourage the development of skills to use them will become more crucial as the benefit system changes and there is a renewed emphasis on moving off benefit and into work. Tenants financial capability Financial capability and early intervention continue to be a priority for providers, as increasing tenants financial capability is an essential part of reducing financial exclusion. Research by Shelter carried out in the West Midlands found that the majority of abandoned tenancies fail either after the first month or within months. This indicated that people were either unable to cope almost from the outset and gave up quickly, or else struggled and gave up when bills or household debt became unmanageable. This is especially true for new tenancies taken up by young people, people who have left institutional care or prison, people who have been homeless in the past and people with young families. Working with tenants to increase financial capability can be challenging. Most landlords do not have an in-house trainer or the resources to buy in bespoke training for tenants. Some housing providers have formed partnerships with local advice agencies who deliver free training to their tenants. In research conducted by Ipsos Mori for CFEB on the financial capability needs of social housing tenants, it was found that tenants who were managing their money and planning ahead were interested in advice on savings and planning for the future. Those tenants who were struggling financially or had fallen into debt were understandably focused on help with day to day budgeting or debt counselling. The internet was seen as a good starting point for information on money, with tenants placing a considerable degree of trust in the information they gleaned from websites. When it came to detailed information, tenants wanted face to face advice from an impartial source they could trust. Discussions about the potential for advice from social landlords raised concerns about impartiality, confidentiality and competence although some saw benefits in talking to someone who understood their circumstances. The Money Advice Service and Barclays Money Skills can both work alongside housing providers to help their tenants to manage their money and make informed choices. 7

8 2. The response A partnership approach to reducing financial exclusion in social housing Barclays and the Money Advice Service (formerly the Consumer Financial Education Body and previously a division of the Financial Services Authority) have funded two Financial Inclusion Advisors (FIAs) since November 2009 to work with CIH to help housing providers take a strategic approach to their financial inclusion work. Ken Dow and Paul O Connor were appointed as FIAs. Paul is the advisor for England and Wales and Ken is the advisor for Scotland and Northern Ireland. The role consisted of five main elements: 1. First-tier consultancies with social housing providers Working with housing providers on an individual basis to raise awareness, and give advice, examples of positive practice and support to help them to develop a strategic approach to financial capability and inclusion. 2. Second- and third-tier follow up work Providing ongoing practical support to 50% of first tier consultancies in the development of their work and implementation of their action plans. This included brokering partnerships with external agencies, raising staff awareness, helping with staff recruitment, reporting to senior executive team or Board, providing a second opinion and linking housing providers with positive practice from across the UK. 3. Developing an online forum To create, support and review a financial inclusion online forum for housing providers. 8

9 4. General awareness-raising in the housing sector Delivering presentations, positive practice seminars and workshops at key housing and stakeholder events to promote the housing sector s role in the financial inclusion agenda. 5. Developing positive practice tools Developing and contributing to the development of positive practice guidance, tools and training courses reflecting the housing sector s strategic approach to developing financial inclusion initiatives. The project s achievements The scheme was widely presented to the sector at no less than 65 conferences across the UK and in a number of articles in the trade press. Altogether, 200 UK housing providers received first-tier advice, and 53 received second- and third-tier advice. The CIH Financial Inclusion online forum, part of the CIH practice hub, was launched on 19 January It features nine specialist forums allowing members to post a query, answer a question or report on positive practice. There are approximately 320 users and there have been over 16,000 visits to the site. More detailed results are given in the Appendix. Development of positive practice Of those housing providers who are delivering financial inclusion services, the main areas of work are in: Helping tenants to access basic bank accounts, savings schemes and affordable credit Offering specialist debt advice to tenants with multiple debt problems and/or rent arrears Offering low-cost tenant contents insurance Helping first time tenants to sustain their tenancies by offering affordability advice, help accessing low-cost furniture and white goods and helping them to save money on fuel bills Partnering with agencies to help train tenants to become more financially aware Training their staff on financial inclusion issues such as identifying illegal money lending, basic money advice skills and welfare benefits 9

10 Lessons learned from the Financial Inclusion Advisor project The FIA project has actively worked with over 200 organisations over the last two years. During that time valuable lessons have been learned. We have recognised that, regardless of the size of the organisation, there are common approaches and challenges in tackling financial exclusion. These are the main areas for consideration in developing financial inclusion work: Use the data you currently hold to assess the impact of welfare changes on your tenants and on your business: What impact will the housing benefit changes have on tenants? How many households contain non-dependants? How are they affected by the cuts? What impact will that have on the services available? Communicate with residents: How do you plan to communicate changes to residents? How is current information targeted? How do you know your current communication approach is effective? Working with tenants: Do you have systems in place to identify new and existing tenants who are financially vulnerable? Do you offer financial health checks to all new tenants? Do you monitor changes in tenant circumstances such as a relationship breakdown or redundancy and consider what this might mean for their financial situation? What support and advice could be offered? Work with staff across the organisation: Do you train frontline staff to identify where tenants might be struggling financially or at risk of becoming victims of loan sharks? Get the basics right: What services are you providing or referring tenants to? Have you considered an audit of the services you already provide? Have you identified any gaps in your service in relation to: - benefit advice - debt advice - access to affordable credit - contents insurance - financial capability - goods and services - utilities advice? 10

11 Develop a business case: Are you able to link investment in financial inclusion activities with savings elsewhere in the organisation? Can you demonstrate the financial benefits of investment in partner agencies such as credit unions and advice agencies? Does your Board understand the importance of investment in financial inclusion work? Ongoing work The need to develop a robust business case to support the continuation of financial inclusion work, including the offer of debt and benefits advice, has never been more pressing. A number of approaches have been adopted to demonstrate return on investment. These include individual housing providers measuring the impact of their work on tenants financial health, and studies analysing the impact of multi-agency investment on a whole economic area. With the recent funding cuts and the recession causing a possible increase in rent arrears, housing providers who have yet to develop a comprehensive approach to promoting financial capability and inclusion will now have to justify allocating resources to it. Two research projects are currently in progress to establish the business case for financial inclusion work: The first is a partnership between Bristol University, Citizens Advice and CIH, and monitors the impact of financial capability training on low-income communities. The second is being run by Hyde Housing Group and the Financial Inclusion Centre and is funded by Friends Provident. It is identifying effective models of delivering debt advice to social housing tenants both in terms of outcomes for tenants, and of value for money and return on investment for the housing provider. The findings of both projects will be published in

12 3. Case studies Case study 1 Helping new tenants to sustain their tenancies The organisation Rhondda Housing Association (RHA) is a local community-based housing association with approximately 1,500 properties throughout Rhondda Cynon Taff. It is a not-for-profit organisation run by a voluntary management board. The financial inclusion initiative The initiative is one of early intervention advice and support in week one of each tenancy. The RHA Financial Inclusion Officer meets with all new tenants during the signup process to try to ensure that they have all the information and advice they need about financially managing a tenancy before they move in. The officer will help the tenant complete a budget sheet to show income against estimated outgoings for the property, carry out benefit checks to ensure the tenant receives all welfare benefits to which they are entitled and complete application forms if needed to apply for benefits not being received. The officer gives help and advice if someone has multiple debt problems, and helps the tenant to set up utility accounts and agree payment methods with each company. A follow-up phone call or visit is arranged to offer any further assistance. Originally this service was provided for a tenant in arrears who had received a notice seeking possession, and for tenants who asked for help (usually with existing debt problems or rent arrears). However, RHA found a high level of rent arrears occurring within the first four weeks of the tenancy start date. New tenants are therefore now referred to the officer as part of an early intervention initiative to try to solve problems before they become unmanageable. 12

13 How did the FIA help? The FIA provided information and advice on the design of an Affordability Toolkit, gave examples of good money matters handbooks for new tenants, shared free financial capability resources and useful websites, and provided advice and research information on how to improve take-up of tenant contents insurance. Some outcomes RHA has worked in partnership with Dragonsavers Credit Union and Cynon Taff Citizens Advice Bureau to deliver a financial inclusion workshop. The initiative is called Money Smart Partnership (MSP). Many new tenants are not receiving all the benefits they are entitled to. The service helps them to claim these, and on average their income increases by just over 32 per week. RHA helped one disabled tenant to reduce a previous housing benefit overpayment from 18,000 to 190 by helping the tenant to challenge the decision. Contact: Natasha McCarthy Tel: (01443) natasha@rhondda.org Case study 12 Promoting a savings culture a match savings scheme The organisation Newlon Housing Trust is a charitable housing association founded in Hackney in 1968 to provide decent and affordable homes for local people. It provides 7,000 homes in eight boroughs in North and East London for people with a wide range of support and care needs. They also deliver regeneration programmes through Newlon Fusion, in partnership with local authorities and community groups in Islington, Hackney, Haringey and Tower Hamlets. These programmes include community activities, training and employment opportunities and environmental improvements. The financial inclusion initiative Newlon Fusion, in partnership with Islington and City Credit Union (ICCU) and London Community Credit Union, is giving incentives to encourage residents to open a savings account and start saving. Residents living in Islington who open a savings account with Islington and City Credit Union, who save at least 5.00 per week or per month for three consecutive months, receive a incentive payment credited to their account. 13

14 Children who open a Young Savers account receive credited to their account as long as they save at least 2.50 per week or per month for three consecutive months. Newlon Housing residents living in Tower Hamlets who open a savings account with Tower Hamlets Community Credit Union and save at least 5.00 per week for ten consecutive months are credited with into their credit union account. Children who have a Young Savers account with the credit union for over a year receive a credit of The scheme aims to increase Newlon residents credit union membership, raising awareness of local saving schemes and encouraging a savings culture. Residents benefit from improved access to affordable credit, helping to reduce reliance on high cost doorstep lending or loan sharks. How did the FIA help? The FIA assisted Newlon in drafting their financial inclusion strategy which included advising on ways to give debt advice to their tenants, the cost implications of different debt advice models, linking services to free debt advice providers and free resources, and helping tenants to find the cheapest fuel supply. Some outcomes Eight additional Newlon households now have access to ICCU services as a result of this scheme. Each new Newlon resident recruited as a result of this project now has an average of 248 in a savings account, and this is rising. Newlon residents who were recruited and became members now have a total of about 6,500 savings, with this being the first and only savings they have. ICCU has issued seven loans to Newlon members with a total value of about 8,000. Robert D Brass is a Newlon tenant and joined the credit union in early Robert said: The staff and volunteers are friendly and welcoming and help out when people have difficulties. I always feel comfortable talking about money at the credit union, knowing that they are also credit union members just like me. It means that saving and borrowing has proven to be fun for me, unlike a visit to the bank. Contact: Ketra Najjingo Tel: Ketra.Najjingo@newlonfusion.org.uk 14

15 Case study 13 Referring tenants to the Money Advice Service The organisations Raise Benefits Advice Service (RAISE) is an independent charity which gives free, confidential, quality advice and training on welfare benefits, debt, and money management issues. For the past 11 years RAISE has specialised in home visits across Merseyside and Runcorn a response to the difficulty experienced by people who are unable to access mainstream advice services due to disability, age, caring responsibilities, mental health, or community isolation. RAISE will visit anyone who is a tenant of six large housing associations in the area (Cobalt Housing, Liverpool Housing Trust, Liverpool Mutual Homes, Pierhead Housing, Plus Dane, and South Liverpool Housing). It also receives funding from Liverpool City Council to provide home visits for Liverpool residents who are unable to access mainstream advice agencies such as the CAB. RAISE pursues people s cases at its offices and at tribunal hearings and also delivers training courses to tenants and housing association staff. The Money Advice Service at RAISE gives advice and information online, over the phone, and in a personal, face to face session with a trained Money Advisor on everything from budgeting and financial planning, understanding tax and benefits, borrowing, saving and investing, to insurance and retirement planning. The financial inclusion initiative The face-to-face sessions are delivered by a range of partner organisations on behalf of the Money Advice Service, and one of these is RAISE. Local housing associations had previously funded RAISE to provide tenants with impartial benefits and debt advice. Working with the Money Advice Service and delivering face-to-face money advice sessions was a natural extension of this, and RAISE was easily able to engage tenants in the service. RAISE visits the tenants in their homes to conduct the session, which although can be time-consuming for the Money Advisors, greatly reduces no-shows a common problem with drop-in and appointment-run services. The Money Advisors help tenants with money management, helping them understand whether they can afford to save, and learn about paying utility bills and insurance. Meanwhile, RAISE s Benefits Advisors help tenants with applications and appeals, and their Debt Advisors help negotiate with creditors. 15

16 Demand for the service is identified through Housing Officers daily interaction with tenants during home visits or other activities. If a Housing Officer identifies a possible welfare benefits, debt or money issue, they will contact RAISE. The Money Advisors also attend activities such as open days and community festivals run by community workers. This demonstrates to tenants the accessibility of the service, and allows them to find out more. RAISE has also put a number of initiatives in place with housing organisations, such as contacting older age-group tenants by phone to offer sessions, and doorto-door calling. The housing associations see the Money Advisor not only as a means to improve their tenants finances, but an essential everyday part of maintaining relations with tenants. Some outcomes One Money Advisor said: Since my visit Mr X is now budgeting more carefully, saves a little each week and has his debts under control. He has joined a local Credit Union and saves with them each week for emergencies. He acted on my referral to a debt advisor, and has a repayment plan agreed, which he can manage. The campaigns with housing organisations have been equally successful. Of the older tenants who were contacted by phone, 30% took up the offer of a Money Advice session, and there was a 10% response rate from the door-to-door calling exercise. Contact: John O Meara Tel: (0151) jomeara@benefitsadviceteam.co.uk 16

17 Case study 14 Helping young people to develop their money skills The organisation Stockport Homes is an arms length management organisation (ALMO) responsible to the council for managing and maintaining 11,591 tenanted properties (both sheltered and general needs) and 323 leasehold properties. Stockport Borough is the only local authority in England to have wards in both the top and bottom percentiles of the Index of Multiple Deprivation, and as such it is the third most polarised borough. One ward, Brinnington, falls within the 2% most deprived in the whole of England. The financial inclusion initiative Barclays Money Skills is a financial literacy programme developed by West Yorkshire Trading Standards Service in partnership with Barclays and aimed at year-olds. The objective is to empower young people with the knowledge to make better financial choices and ultimately to help make them more capable and informed consumers. Barclays Money Skills teaches young people about topics ranging from budgeting to banking, affordable credit, credit agreements, illegal money lending and issues such as identity fraud and phishing scams. The aim is that participants not only acquire the knowledge of basic requirements for money management, but also enterprise skills such as team working, communication, leadership, problem solving, creativity, presentation and meeting deadlines, all of which are transferable skills and vital for securing and maintaining employment. At Stockport Homes, the Educational Officer has been trained (by Trading Standards, West Yorkshire Joint Services) to deliver Barclays Money Skills sessions to young people locally. Since April 2010, Stockport Homes has delivered seven Barclays Money Skills sessions to over 260 young people in Stockport, through established partnerships with West Yorkshire Trading Standards, Barclays, Connexions and local schools. Four out of the seven sessions also provided Stockport Homes with an opportunity to educate the young people about homelessness, housing options and how to apply for housing with Stockport Homes through Homechoice, the choice-based lettings scheme. One of the seven sessions was delivered at Stockport Homes men s temporary accommodation scheme as part of their weekly brunch club session. One of the main challenges to delivering Money Skills sessions has been engaging with local NEETs (those not in employment, education or training). Young people who are NEET are often hard-to-reach and socially excluded. 17

18 Consequently, two planned Money Skills sessions were cancelled due to nonattendance. However, in order to encourage young people to attend the Money Skills sessions, a prize draw of 25 high street vouchers was offered, a free lunch was provided and Connexions provided free bus passes to assist with travel. The Money Skills sessions also counted as a compulsory workshop on the Connexions Activity Agreement Programme, which encouraged attendance. Some outcomes Over 260 young people in Stockport have been empowered with the confidence, knowledge and understanding to manage their money effectively. They have also learnt about key financial terms (e.g. credit, APR, unsecured loans, etc), how to read and understand a bank statement and recognise the difference between legal and illegal sources of credit. As a result of attending the Money Skills sessions, five young people (who are NEET) have now opened a basic bank account with the support of their Connexions personal advisor. These young people were then able to receive their 30 weekly Activity Agreement money from the government directly into their new bank account, rather than by cheque (and then having to find alternative and less economical way of cashing it). 71% of young people rated the Barclays Money Skills sessions as good or excellent. Teachers from Stockport School rated the Barclays Money Skills sessions as good or excellent and were very satisfied with the Barclays Money Skills resources. The Barclays Money Skills kit has helped to develop and increase the Stockport Homes Educational Officer s financial literacy and understanding, which in turn has been fed into other educational sessions delivered (by the Educational Officer) on homelessness. One NEET young person said: This session will help me when looking for property or using more of the bank s features. This course will help me to look after my money and know how to use my bank. Contact: Cat Parsons Tel: cat.parsons@stockporthomes.org 18

19 Case study 1 Case study 5 Making money work supporting tenants to be financially ready for employment The organisation Hillcrest Housing Association (HHA) is one of Scotland s largest regional housing associations, with over 40 years experience of managing and developing quality housing. They are non-profit making and have charitable status. HHA provide a comprehensive range of affordable accommodation, specialising in general needs housing for families, couples and single person households. They provide a tenancy support service to people who are vulnerable to homelessness through tenancy breakdown, or those who are experiencing difficulties and feel they are not coping well. From their offices in Dundee, Edinburgh, Arbroath and Perth they manage around 5,000 homes for rent and low-cost home ownership. The financial inclusion initiative HHA were aware that employability was to be a big issue and that Dundee had been awarded a large sum of money from the European Social Fund to move people from benefits into employment, education or training. They developed a project looking at key themes such as banking difficulties, hidden debts, budgeting, in-work better-off calculations and in-work benefits. The project has five advisors and is funded by three partners: Dundee Partnership until 2013, ESF until 2012 and Wider Role until How did the FIA help? The FIA s role has mainly been supporting Hillcrest through the provision of positive practice information, staff awareness talks, and advice regarding savings and loans products. In addition the FIA has shared a number of conference platforms with HHA s Joy Watson, promoting financial inclusion using the Hillcrest strategy as an example of a holistic approach to the support of tenants in social housing. Some outcomes Higher profile for the organisation. Expanded knowledge of wider role activity. Working with new partners brings new opportunities. Better understanding of client issues often the clients are HHA tenants or another association s tenants. Tenants better able to pay rent and other bills. Tenants feel valued. Building stronger communities. Some of the tenant feedback has included: Great service on the ball. I had 800 put into my account which I would not have had otherwise. Without places like yours for help, people would not know which direction to go. Contact: Joy Watson Tel: jwatson@hillcrestha.org.uk 19

20 Case study 16 Working in partnership to combat loan sharks The organisation Knowsley Housing Trust (KHT) is a large scale voluntary transfer housing association, based in the borough of Knowsley, Merseyside. They own approximately 13,800 homes. In the Index of Multiple Deprivation in 2007, Knowsley ranked as the fifth most deprived local authority in the country. The financial inclusion initiative KHT have worked in partnership with the Illegal Money Lending Team (IMLT) (part of Trading Standards North West) since 2008 and have done the following to promote the work that IMLT do to combat illegal money-lending in KHT s neighbourhoods. KHT have: Reported to IMLT several examples of suspected loan shark activity. Produced numerous press releases in local media and tenant publications about help available and alternatives e.g. credit unions. Worked on promotional campaigns through doorstep targeting in neighbourhoods and promotion at events e.g. Tenants Day. Set up a confidential helpline for victims of loan sharks, resulting in five reports of activity which were sent on to the IMLT. Re-housed a victim who made a witness statement which led to a conviction of a loan shark. Trained all frontline staff on identifying tenants affected by loan sharks and how to help. KHT have developed partnerships with the following organisations to combat illegal money lending: Credit unions The Citizens Advice Bureau The local authority The police service Schools and children s centres How did the FIA help? The FIA met with various employees within the organisation to help them in reviewing KHT s existing financial inclusion strategy. Improving KHT tenants financial capability was seen as a priority as was fast tracking them to specialist debt advice services and increasing tenant contents insurance take-up. 20

21 Some outcomes Credit union (CU) membership has grown in Knowsley. Over 100 members of KHT staff have been recruited to a credit union payroll deduction scheme, which has been publicised to encourage tenants to do the same. They have approximately 3,000 tenants with two major credit unions. Through taking loans from the CU as opposed to doorstep credit, this has saved KHT tenants considerable amounts in interest charges. Due to the nature of loan sharks, it is very hard to establish the exact extent of activity in KHT s neighbourhoods. However the North West is one of the busiest areas in the country for prosecuting illegal lending, and KHT have seen a number of high-profile convictions for loan-sharking in their neighbourhoods. In one case, the IMLT seized and removed a number of documents, which showed illegal loans had been taken up by 145 people, with APR rates ranging from 886% to 131,000%. As in many cases, this loan shark had preyed on vulnerable people and became intimidating when his customers could not pay. Tony Quigley, Manager, Illegal Money Lending Team said: The Illegal Money Lending Team have worked in partnership with KHT to raise awareness of loan sharks to tenants whilst also using specialised services to support victims of such lenders. KHT have also provided specialist housing support to a number of witnesses involved in cases which helped us secure a recent prosecution against a loan shark. We value the partnership approach KHT have taken and look to continue that work in the future. Contact: Darren Reynolds Tel: Darren.Reynolds@k-h-t.org 21

22 Case study 1 Case study 7 Promoting and increasing access to low-cost tenant contents insurance The organisation Wrekin Housing Trust (WHT) is a large scale voluntary transfer housing association, established in 1999 when over 13,000 homes were transferred from Telford and Wrekin Council in Shropshire. The financial inclusion initiative Historically WHT s take-up of tenant contents insurance (TCI) was low. In September 2008 WHT conducted a Money Matters survey with residents which found that over 75% of those encountering financial problems did not have any form of TCI. 30% of all customers surveyed were unaware that WHT offered a TCI scheme. WHT recruited a TCI officer to promote its benefits and to act as a link between the insurer and the tenants. Prior to the creation of this post the relationship between WHT, their broker, the insurance company and the claims handling company was purely based around the necessary business and admin functions. Since having a dedicated post, WHT have developed an excellent relationship with the other partners and maintains regular contact. They have received support in the form of marketing, press releases, staff training, sharing practice and expert advice on individual claims. By better understanding the customer experience and the whole process of making a claim, WHT is more effective at promoting the policy and the excellent service that customers can expect. WHT has had limited success with reaching those under 35 years of age. Their Money Matters survey highlighted that this group were the least likely to have TCI. They targeted this group with a direct mailing but are constantly looking for other innovative ways to reach them, such as . Initially WHT were conscious of a possible conflict of interest with housing staff promoting insurance whilst also chasing rent arrears. However they overcame this through raising the profile of the work and helping staff understand the benefits of TCI for both customers and the business. Also, by centralising the procedures and taking certain duties away from locally based staff (such as admin functions and issuing application forms) they are able to look at the TCI product more objectively and recognise the importance of discussing it with customers, without creating additional work for staff. 22

23 How did the FIA help? The FIA provided information on delivering financial capability workshops and getting people to attend; assisted with the review of WHT s financial inclusion strategy and action plan; advised on the different ways to support their local credit union; and gave some information and resources on providing affordability information at the start of the tenancy using various formats. Some outcomes WHT have raised the profile of TCI across the organisation and provided training to frontline staff. WHT s TCI expert has attended and engaged with local residents groups, making them more aware of the importance of having insurance and the product available. This has improved the messages that these key residents share with their communities. Along with the move to a sub account, WHT also changed the way that payments cascade onto rent accounts. All payments made by tenants pay the small TCI premiums first, ensuring that customers remain protected even if they have rent arrears. By working very closely with the insurer, broker and claims handler, WHT have a greater insight into the whole claims process allowing them to promote the very positive customer experience that these companies contribute too. WHT s TCI initiatives formed a key part of a successful award bid in 2010, and they were announced as winners of a CIH UK Housing Award in the Supporting Social and Economic Inclusion category. Whilst they have not undertaken a formal impact assessment, WHT do encourage feedback from customers and frequently use customer quotes to support ongoing promotions. For example, trust tenant Konstantin Simonov of Shrewsbury said: I went around various banks to get quotes for my home contents insurance but was pleasantly surprised when I discovered that the Trust provided their own comprehensive scheme and that it was very affordable. I also love the fact that I have a direct number for the insurance contact within the trust and that I don t have to deal with a call centre. I like the flexibility of the payment options as well because it means I can pay the premiums without the need to set up a direct debit and therefore have more control over my finances. Contact: Deb Morrison Tel: deb.morrison@wrekinhousingtrust.org.uk 23

24 Further information Advice A4e: Advice UK support network for free, independent advice centres: Citizens Advice: Money Advice Trust: The Money Advice Service: Clear, unbiased money advice to help everyone manage their money better and help people make informed choices Affordable credit Association of British Credit Unions: Community Development Finance Association: Financial regulation Financial Services Authority: FSA guidance for housing providers on financial regulations and financial inclusion activity: 24

25 Information forums CIH Financial Inclusion online forum for Housing Practitioners: Now Lets Talk Money, information on the government s campaign to tackle financial inclusion: Transact, the national forum for financial inclusion: Insurance Association of British Insurers (ABI) website includes information for consumers and stakeholders: 25

26 Appendix: Outputs from the Financial Inclusion Advisor project Consultations Number of organisations receiving first-tier advice (Scotland and Northern Ireland) 102 (target 60) Number of organisations receiving second- and third-tier advice (Scotland and Northern Ireland) 25 (target 30) Number of organisations receiving first-tier advice (England and Wales) 98 (target 60) Number of organisations receiving second- and third-tier advice (England and Wales) 28 (target 30) Speaking engagements at conferences, seminars and forums FIAs spoke at 65 engagements, including CIH seminars and conferences. Of these, 36 were in England and Wales and 29 in Scotland and Northern Ireland. CIH financial inclusion course CIH developed a programme, equivalent to a level 5 qualification (comparable to undergraduate level), to support the development of Financial Inclusion Strategies in housing organisations. This was attended by 38 people and ran until February Mentions in publications and articles CIH Financial Inclusion Action Plan CIH E-Zine Outline of role and offer of consultancy CIH Housing Magazine 2 articles Scottish Housing Matters Inside Housing In-Tray article. CIH Spotlight on Financial Inclusion CIH/CRC Financial Inclusion and Rural Social Housing Inside Housing feature on the FI Community Network CIH Making Connections financial inclusion in practice 26

27 Practice Hub The CIH Financial Inclusion online forum, part of the CIH practice hub, was launched on 19 January It features nine specialist forums where members can post a query, answer a question or report on positive practice. It also contains latest news and publications and a calendar of events and training. Reports are given on developments from the FIAs, and each month the forum runs a feature on a particular housing provider. There is a list of useful websites, including a link to the Department for Work and Pensions Champions initiative. There are approximately 320 users predominantly practitioners and operational staff and there have been over 16,000 visits to the site. 27

28 Financial inclusion is defined as ensuring that everyone has access to appropriate financial services, enabling them to manage their money on a day-to-day basis, plan for the future and cope with financial pressure, and deal effectively with financial distress. Financial capability is a broad concept, encompassing people s knowledge and skills to understand their own financial circumstances and manage their money, along with the motivation to take action. Research has shown that 60% of those who are financially excluded are resident in social housing. Key issues are: access to banking; lack of insurance; access to affordable credit; access to advice and financial capability. Many housing providers are integrating financial inclusion and financial capability work into their day-to-day housing management as well as having stand-alone initiatives. As well as the benefits for individual residents and wider communities that financial inclusion work can bring, there is a strong business case for housing providers to engage in this work. Tenants with more money in their pocket are more able to sustain their tenancies. As well as reducing evictions, abandonments are also reduced, as tenants no longer walk away from a tenancy to escape creditors or because they cannot afford to heat their homes. This report provides the lessons learned from the CIH Financial Inclusion Advisors project. The report draws on the experience of some leading housing providers in developing their financial inclusion and capability work, highlights examples of positive practice and considers the ongoing challenges for social landlords in delivering this work going forward. Chartered Institute of Housing Octavia House Westwood Way Coventry CV4 8JP Tel: