The Draft Financial Capability Strategy for the UK

Transcription

1 The Draft Financial Capability Strategy for the UK CAP s Money Advice Service s consultation October 2014 Lifting people out of debt and poverty

2 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 2 Executivesummary ChristiansAgainstPoverty(CAPwelcomestheMoney AdviceService sambitiontoimprovefinancialwellbeing acrosstheuk.itisexcitingtoconsiderthepotentialimpact theactionsundertaken,aspartofthefinancialcapability Strategy,willhaveonlivesacrossthenation. FinancialcapabilityisattheheartofwhatwedoatCAP. Throughournetworkof270CAPDebtCentres,CAP improvedthefinancialwellbeingof11,996householdsin 2013.Inadditiontothis,CAPisthelargestprovideroffaceZ tozfacefinancialeducationintheuk,with879capmoney ChurchesprovidingathreeZweekmoneymanagement course,equippingover12,000peopleeachyeartobudget, saveandspendwisely. Thestrategytargetsmanyofthekeyaspectsoffinancialcapability,boastingabreadthof aimsandcomprehensivelistsofrecommendedactions.weappreciatetheopportunityto feedintothestrategy.itisourhopethattheinsightsgainedfromour18yearsexperience helpingthosestrugglingwithunmanageabledebt,andinparticularasaprovideroffinancial educationsince2008,willaddvaluablesupportandenhancethedevelopmentofthe strategy. WewouldliketopraisetheMoneyAdviceServicefortheirdeterminationanddriveto improvefinancialwellbeingacrosstheuk.wearepassionateaboutcontinuingtoempower localcommunities,offeringholisticsupporttothoseinfinancialdifficultyandexpandingour rangeofservicestotacklethecausesofpoverty.tothisend,capnowoperates101capjob Clubsandispiloting22CAPReleaseGroups,totackledependenciesandunemployment. ThankyouforyourcontinuedcommitmenttoimprovingfinancialwellbeingacrosstheUK. DawnStobart DirectorofDebtManagementandCreditorRelations AftertheCAPMoneyCourse,Ifeelmoreincontrolofmyfinances,insteadofthem controllingme

3 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 3 1. WhattimeperiodshouldtheFinancialCapabilityStrategycover? Theproposedtimescaleisappropriate. ThefiveZyearperiodgivesadequatetimefornewinitiativestobesetup,andtheinitial resultstobeobserved.italsoallowsthestrategytoberevaluatedandimprovedforthe longerzterm.asacruciallifeskill,programmestoequippeopleandencouragethemtomake financiallycapablechoiceswillhavealastingimpact. ConsiderationshouldalsobegiventothelongerDterm. Although,thestrategyaimstoseeamaterialeffectupto2025,itmaybeoveramuch longertimehorizonthatthefullextentofthestrategy simplicationsareevident. Furthermore,whilefiveyearsisagoodlengthoftimetoinstigateinitialactions,itis importanttorememberthisshouldbeanonzgoingproject.therewillalwaysbegroupsof peoplethatrequirefinancialeducationandreactiveprovisionforfinancialdifficulties. Therefore,CAPwouldencouragetheMoneyAdviceServicetoincludeimpactsthatmight developafterthestrategyhasofficiallyendedinit sbenefitevaluationsandtoseethis strategyasabasisforcontinuedprovision. 2. WhatisyourviewoftheFinancialCapabilityFramework? TheFrameworkisextremelyhelpfultounderstandthecomplexitiesoffinancialcapability. ByprovidingabreakdownofthecontributingfactorsandtheirinterZrelatednature,the frameworkisusefultoassesswhetherproposedactionswilltargetallareas.thiswillbe helpfultomaximisetheoverallimpactofthestrategy. Motivationisimportant,butshouldn tbethemainfocusofthestrategy. Motivationisidentifiedasthemostimportantfactor,andtosomeextentithasanessential roleinencouragingpeopletoengagewiththestrategy.however,ability(skillsand knowledgeunderwritesthecapacityapersonhasforfinanciallycapablechoices.therefore, itisimportanttoremembermotivationaloneisnotenoughwithoutthefacilitiestoprovide education.itislikelyincreasingmotivationwouldhaveveryashortzlivedeffectifapersonis unabletoturnthisintoanactualincreaseintheirfinancialcapability.however,increasing abilitywillhavealongztermeffect,asevenifmotivationwainsatpointsduetoexternal factors,peoplewillstillbecapableoffinanciallycapablebehaviourswhencircumstances necessitate. 3. HowfardoyouagreewiththeobjectivesoftheFinancialCapability Strategy? TheobjectivesdemonstrateagoodbalancebetweentheinterDrelatedfactors. Tacklingpersonalfinancialcapability,barrierswithinthesystemandenvironmentalfactors createsacomprehensivesetofobjectivesforthestrategy.itisparticularlyencouragingthat thestrategyisaimingtonotonlyhelpthoseinfinancialdifficultybutalsohasprevention aims.thisisconsistentwiththeworkcaphasbeingdoingthroughthecapmoneycourse, aswellasthroughourdebtcounsellingnetwork. Financialresilienceshouldbeakeyobjectiveofthestrategy. Oftenfinancialdifficultiesariseduetounexpectedlifeevents.Whilethestrategyshouldbe

4 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 4 commendedforitsobjectivestoprovidesupportinthesesituationsandknowledgeof wheretoseekhelp,itlacksemphasisonfinancialresilience.incap sexperience,peoplein financialdifficultiesdonotalwayslackfinancialcapability.manycapclientshadbeen managingtheirmoneywellandpreparingforlifeahead,yettheylackedfinancialresilience todealwithincomeshocks.althoughthisismentionedinthefinanciallycapablebehaviour domains,greateremphasisshouldbegiventoencouragesavingasakeyobjective. Savingisanimportantobjectiveforallincomelevels. Thereareseveralreferencesthroughoutthedraftstrategytoimprovingaperson s wellbeingpositionasmuchastheirmeansandpressuresallow.whilst,theabilitytosaveis constrainedbyaperson sfinancialmeans,itisimportantthatthestrategyisnot overcautiousaboutencouragingthoseonlowincomestosave.theaverageincomeofacap clientis 12,840,yetsavingsarestillbuiltintothemajorityofthebudgetscreatedfor clients,evenifthisisjust 10or 20amonth.Itisthislowincomegroupthataremost vulnerabletounexpectedexpenditureandthereforeitisessentialthereisstrong encouragementforthisgroup,inparticular,tohavesavingsdespitetheirlowmeans. 4. Whatisyourviewofthefinanciallycapablebehaviourdomains? Thebehaviourdomainsarehelpfultovisualisetheanticipatedoutcomesofthestrategy. Thefourdomainspresentedcapturethelargebreadthofbehavioursthatarefacilitatedby financialcapability.thisishelpfultoconsiderthepotentialoutcomesofthestrategyandthe actionsneededtogetthere. Thefourdomainsaresufficientandareverycomprehensive,butdomisssomeelements. Therearenootherbehaviourdomainsthatareevidentwithstrongfinancialcapabilitythat needtobeincluded.however,whilstthedomainsareallextremelycomprehensive,there areacoupleofelementsthataremissing.firstly,in managingmoneywelldaytoday there isnomentionofreducingexpenditure.thecapmoneycourseencouragesdelegatesto considernotonlyhowtomaximisetheirincome,asmentionedinthisdomain,butalsohow tominimiseexpendituretobalancetheirbudget.thiscanbedonebycuttingcosts doingit cheaper;cuttingback doingitless;orcuttingout notdoingit.thiselementofmoney managementshouldbeincludedinthedomains.noteveryoneisabletoincreasetheir income,buteveryonecanreducetheirexpenditure,forexamplebyswitchingenergy providerormakingpackedlunches.secondly,financiallycapablebehaviouralsoincludes usingcreditresponsiblywithoutgettingintodebtproblems.therefore,thedomain tackle problemdebt shouldalsoincludeprovidingeducationontheappropriateuseofcredit,and informationonalternativeproductstohighzcost,shortztermcreditinparticular.cap encouragesclientstolivewithouttheuseofcredit,and96%ofthosewhobecomedebtfree throughcap sserviceremaindebtfree.thisdemonstratesthatdebtisnotinevitable,even forthoseonlowincome,andthereforepartoftacklingdebtproblemsshouldbe discouragingtheuseofcreditaltogether. AftertheCAPMoneyCoursewenowhaveagreaterunderstandingofourspendingon littlethings,likecupsofcoffee,sweets,etc. Ithinkmoreabouthow,andwhat,Iamspending.DoIneedthisordoIsimplywantit?If it sthelatter,idon tbyit realprogressforme

5 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 5 5. HowimportantisittomeasuretheimpactoftheFinancialCapability Strategy? Measuringthestrategy simpactisdesirable. CAPwelcomesthededicationtoevaluationandmeasurementwithinthestrategy. Measuringtheimpactofthestrategywillbeimportanttodeterminewhichactionsare successfulandidentifygapsintargetingthefactorsoftheframework.ensuringtheavailable resourcesareallocatedaswiselyaspossibleandtothebiggesteffectisbeneficialto maximisethepotentialofthestrategy,butcautionshouldbetakentoensurewhere evidenceisnotavailableitisnotjustassumedthattherearenodesirableoutcomes happening. The wellbeingstaircase modelpresentedinthedraftstrategyistoosimplistic. InCAP sexperience,aperson sfinancialsituationismorefluidthanthismodelsuggests.for example,peoplemaybefinanciallyresilientinthelongerztermbutnottheshortzterm, makingprivatepensioncontributionsbutnothavingsavingsforunexpectedeveryday expenditures,suchastheirboilerbreaking.furthermore,itiscommonforsomecapclients toactinafinanciallyinconsistentwayandhavesignificantsavingsaswellasoutstanding debts.inadditiontothis,someenduponthebottomstepwith unhealthydebtproblems notduetofinancialincapability,butduetounexpectedcircumstances,suchasillhealth. Oneclientforexample,workedinthefinancialindustryandmanagedtheirfinanceswell beforefallingill.theywereunabletoinformtheirmortgagecompanywhythey dmissed payments,andtheresultingdebtproblemswerenotduetolackofknowledgeorlacking financialresilience,butbeingphysicallyunabletomanagetheirfinancesatthattime. Therefore,notonlymayitbedifficulttomeasurewhereapersonisonthestaircase,asthey mayexhibitattributesassignedtoseveralstepssimultaneously,butalsobecausetheir situationmaynotreflecttheirleveloffinancialcapabilitybuttheircurrentcircumstances. ConsiderationalsoneedstobegiventothemacroDeconomicclimate. Furthermore,theaggregatestatisticquotedinthedraftstrategyofthenumber struggling withtheirfinancesbeforeandafterthe2008recessionshowstheadditionalmeasurement challengesbroughtbythemacrozeconomicclimate.itisnotaccuratetoassumealarger number struggling reflectsworsenedfinancialcapability.aneconomicdownturnpushes thosewhoarefinanciallyinsecureovertheedgeintonoticeablefinancialdifficulties. AttentionneedstobegiventohowthemacroZeconomicclimatemayskewmeasurementof theimpactsofthestrategy. 6. Whatareyourviewsontheprioritiesforactionthathavebeenidentified asafocusforthestrategy?shouldanyadditionalareasbeadded? Itisgreatthatthestrategyisprioritisingparticularlyvulnerablegroups. Thesearegroupsforwhomthestrategywillhavemoresignificantimpacts.Theothermain groupthatwouldremarkablybenefitfromincreasedfinancialcapabilityisexzoffenders.the CAPMoneyCoursehasbeenrunbyCAPvolunteersinprisons.Wewouldencouragethe strategytoexpandonthis,includingfinancialcapabilityinrehabilitationprogrammes. Additionally,thestrategyshouldperhapsalsoconsidergroups,suchasUniversalCredit claimants,whoexperiencetransitionalchangesthatpresentparticularshortzterm challenges.inthisinstance,improvingfinancialcapabilityinthetransitionalperiod,by

6 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 6 helpingclaimantsunusedtoreceivingmonthlyincomewouldmakeasignificantdifference totheirfinancialwellbeing. Nevertheless,financialeducationshouldbeprovidedforall. Whileparticularlypoorfinancialcapabilityisconcentratedamongstcertaingroups, everyonecanbenefitfromincreasedfinancialcapability.with61%ofpeoplereportingthey feelfinanciallyunsecure,theuk sfinanciallywellbeingwillbeincreasedmostsignificantly thewiderthereachofthestrategy.thecapmoneycourseisattendedbydelegatesofall incomeandagegroups.eventhosewhoappearmostfinanciallysecurebenefitfromthe course,asdemonstratedfromthequotebelow. 7. HowfardoyousupporttheStrategy saimsforchildrenandyoung people? CAPcompletelysupportsimprovingthefinancialcapabilityofchildrenandyoungpeople. Itiswellknownthatchildpovertyhaslonglastingeffects.Poorchildrenoftenbecomepoor adults,repeatingthebehaviourpatternstheylearntaschildren.thisisdemonstratedbythe quotebelow.equippingchildrenandyoungpeopletomakefinanciallycapablechoiceswill notonlyequipchildrenofallbackgroundsforoncetheyreachfinancialindependence,but alsohelpbreakthiscycleofdeprivation.capbelievesthisprioritygrouparesettobenefit mostsignificantlyfromthestrategy,preparingthemtomanagemoneywellthroughoutthe restoftheirlives. 8. Whatisyourviewoftherecommendationsforactionrelatingtochildren andyoungpeople?howcouldtheybeimproved? Despitethestrongaimsofthestrategy,theactionsproposedcouldbeimproved. Thestrategyisheavilyreliantonfinancialeducationbeingprovidedbyparentsandcarers, despiteacknowledgingthatfamiliesrarelytalkopenlyaboutmoney.thisnotonlyrelieson motivatingparentsandcarerstotalkaboutmoneyissueswiththeirchildren,butalsothat theyhavehighlevelsoffinancialcapabilitythemselves.thereislittleprovisioninthe strategytoincreasefinancialcapabilityfortheadultpopulationasawhole.additionally,itis Iwasalwaysquitegoodwithmoney.TheCAPMoneyCoursetaughtmevitalskills.Inow understandthebestwaystospendweeklycash.ihavelearntbetterwaystosave,i mfree fromhavingtofeelstressedaboutupcomingeventslikebirthdays,christmasand holidays. EversinceIwasalittlegirlwehaddebts;mymumusedtosendmetothedoortotellthe rentcollectorsthattheyweren tin.asateenageristolefoodsomybrothersandsisters couldhaveameal.lifegotworseandworse,peopleabusedmeformoneyandiresorted tocrimeandprostitutiontomakeendsmeet.whenicalledcapforhelpiwasseriously depressedandsuicidal.ihadn tbeenoutofthehousefor15monthsandiwasrelianton alcoholtonumbthepain.ihadbeentryingtopayoffmydebtsforyearswithoutsuccess.

7 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 7 importanttoconsiderthatevenwiththissupport,somehomesituationsaretoochaoticto provideagoodexampleofmoneymanagement. Financialeducationshouldbeprovidedinschools. Thepotentialbenefitsofincreasingchildren sfinancialcapabilityaresosignificant,thatto presumeparentsandcarersareteachingtheirchildrenathomeisinadequate.therefore, provisionshouldbestandardisedandprovidedinschools.inthepast,thefinanceindustry hasbeenprominentinprovidingthis,butthesecourseshavebeenfocusedonfinancial productsratherthanfinancialeducation,suchasbudgetingskills.capwouldencourage financialeducationtobeprovidedbythirdpartieswithoutavestedinterestintheuseof particularfinancialproducts.caprecentlylaunchedcapmoneykidsandcapmoneyyouth. Thesecoursesareruninschoolsoryouthgroupstoteachbasicbudgetingskills,teaching childrenhowtomanagemoneyandintroducingthemtotheconceptsoffinancialsecurity andresilience.sofar92capmoneykidsand346capmoneyyouthcoursetraining resourcesarebeingusedbyourvolunteers. 9. HowfardoyousupporttheStrategy saimsinrespecttopreparingfor laterlife? Thestrategy saimsforpreparingforlaterlifefillsalargegapinfinancialadvice. Itisimportantpeoplearepreparingforretirement,asduetothefixednatureoftheir income,povertyisespeciallywidespreadamongstolderpeople.therehavebeenseveral policychangesrecentlythathavetakenstepstotackletheprevailingshortzsightednessin people sfinancialdecisionmaking.however,aimingtoempowerpeopletomakekey financialdecisionssuccessfullycomplementsthese.capispleasedthestrategyisseekingto helppeoplemakeadequateplans,ratherthanstickingtodefaultarrangementsinprovision. 10. Whatisyourviewoftherecommendationsforactionrelatingto preparingforlaterlife?howcouldtheybeimproved? Thestrategyshouldgofurther,andadvisepeoplehowmuchtosaveforretirement. Therecommendedactionsprovideagoodrangeofprogrammesthatwillequippeopletobe encouragedandabletosaveforretirement.whilemotivationisimportant,thereisalsoa majorknowledgegapthatneedstobeovercome.itwouldbemoreusefultogobeyondthe proposedactionsandprovideadviceonthebestwaytoprepareforlaterlife.choosingthe rightpensionandamounttoinvestrequiresspecialistknowledge.itwouldbegoodif specialistadvicecouldbeprovidedaspartofthestrategytobridgethisknowledgegapearly inpeople sworkinglivestoallowthemtobesurethey readequatelysavingforafinancially secureretirement. 11. HowfardoyousupporttheStrategy saimsforolderpeople? Financialwellbeingisimportantforallages. Olderpeopleoftenhavespecificissuesthatrestricttheirfinancialcapability.6.05%ofCAP clientsareover65,andthisagegrouphasthehighestaveragedebtlevelwhenstartingwith CAP.CAPwelcomesthestrategy saimstoaddresstheparticularphysicalandcognitive barriersfacedbyolderpeople.

8 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org Whatisyourviewoftherecommendationsforactionrelatingtoolder people?howcouldtheybeimproved? CAPwelcomesactiononspecificchallengestoolderpeople sfinancialcapability. Thestrategyforolderpeopleaddressesmanyofthekeychallengesspecifictothis generation.manyoftheactionswillbeinvaluabletoolderpeoplefacingspecificagezrelated challenges,suchascognitiveimpairment.however,itisimportantnottoviewthebasic financialcapabilityissuesinthisgroupasdistincttotherestofthepopulation.while, pensionersareonafixedincome,theskillsrequiredtobalanceabudgetarethesame,and latetakezupofdebtadviceisnotexclusivetothisparticulargroup.muchofthespecific supportneededisanextensionoftheactionsthatshouldbeofferedtoall.forexample, whiletherequiredmoneymanagementskillsareconsistentwiththegeneraladult population,olderpeoplemayrequireparticularsupporttoaccessonlineservices.capoffers financialeducationcoursesthroughlocalchurches,andalthoughtheseuseanonline budgetingtool,coachesareabletogiveoneztozonesupporttothosewhoneedhelp accessingthis.thisfacilitatesolderpeopletointeractwithpeopleofallagesfromthewider community,benefitingthembyreducingpotentialsocialisolation.inadditiontothis,there isaspecificsectionofthecourseonmaximisingincometailoredforretireddelegates, encouragingthemtocheckthey rereceivingallthebenefitsthey reentitledto. 13. HowfardoyousupporttheStrategy saimsforpeoplewithfinancial difficulties? CAPfullysupportsthestrategy saimsofpreventionandsupportfortheoverdindebted. TheMoneyAdviceService srecentreport Indebted'lives,established18%oftheUK sadult populationisoverzindebted.asawhole,thestrategywilldomuchtohelppeopleavoidthis situation,butcapwelcomesitsspecificaimtoreducethenumberofpeoplewhobecome overzindebted.preventioniskeytoensuringlesspeoplesufferthedamagingimpactsof unmanageabledebt. TherightadviceandsupportforthosealreadyoverDindebtedisalsovital. In2013,CAPreceived25,302initialcallsfromthoseinfinancialdifficulty,withatotalof 11,996clientsreceivingfulldebtmanagementsupport.Aspreviouslymentioned,evenwith highlevelsoffinancialcapability,overzindebtednesswillcontinuetoexist.therefore,itis essentialthatthereisongoingprovisionofsupportservicesforthoseinfinancialdifficulties. CAPalsowelcomesthestrategy saimstoprovidedebtreliefquickly.62%ofcapclients waitedoverayearbeforeseekinghelpwiththeirdebts,oftenduetonotknowinghelpwas available.itisclearmorecanbedonetoincreaseknowledgeanduptakeofexistingsupport. 14. Whatisyourviewoftherecommendationsforactionrelatingtopeople withfinancialdifficulties?howcouldtheybeimproved? Thedebtadvicesectorprovidesafantasticrangeofdebthelp,butmorecapacityisneed. Therearealreadymanydebtmanagementorganisationsprovidingexcellentservicesto thoseinfinancialdifficulties.nevertheless,ifthestrategymeetstheaimofencouraging morepeopletoseekhelp,extracapacityneedstobecreated.itisessentialthatavarietyof supportservicesexisttoprovidethemostappropriatedebtsolutiontoeachindividual.in particular,capwouldadvocatethecreationofmorefaceztozfaceservicecapacity.although,

9 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 9 thisisthemostresourceintensive,researchsuggestspeoplefeelmostcomfortable discussingtheirfinancesinperson,andsuchservicesaremosteffectiveforthosewiththe mostseverefinancialdifficulties. Creditorsareuniquelypositionedandkeytosupportingthoseinfinancialdifficulty. Theabilitytospottheearlysignsoffinancialdifficultiesandbeingincommunicationwith themajorityofthoseindebtmeancreditorsarekeytotheearlysignpostingofdebtorsto debthelp.capwouldliketocommendtheprogressthecreditindustryhasmadeinrecent yearstosupportthoseinfinancialdifficultyandthecommitmentofmanycompaniesto workwithdebtmanagementorganisations.thestrategyshouldacknowledgeandexpand existingbestpracticesacrosstheindustry.capagreesitwouldbenefitdebtorsforthese practisestoalsobeencouragedamongstutilitycompanies,particularlytelecommunications companies,andthepublicsector. FinancialeducationiscentraltothelongDtermeffectivenessofdebthelp. Organisationsworkingwiththoseinfinancialdifficultyhavetheopportunitytosignificantly impactthefinancialcapabilityoftheirclients.peoplewhohavesoughthelpwiththeir financesareoftenmostinclinedtochangetheirfinancialbehaviours,havingsufferedthe negativeconsequencesoftheiractions.consequently,debthelpcaneasilyincreasetheir immediatefinancialwellbeingandalsotheirabilitytomaintainthisforthelongerzterm.cap providesafinancialeducationcoursespecificallyforclients,andworkswithpeopleuntil they redebtfree.thisonzgoingsupportrequiresclientstoliveonabudgetforasustained periodandclientsareencouragedtosavethroughtheircapplan.additionally, comprehensivesupportisprovidedbyourlocalagentstotackleanyotherwiderbarriers clientmayhavetofinancialwellbeing.thisencouragesclientstodevelopfinancialresilience andequipsthemwithskillstosafeguardtheirfinancialwellbeing.asaresult,96%ofcap clientswhobecomedebtfreethroughourserviceremaindebtfree.capwouldencourage themoneyadviceservicetomakesuchactionscentraltothedebthelpitprovides. 15. HowfardoyousupporttheStrategy saimsinrelationtotheeaseand accessibilityofproductsandservices? Theseaimswillsupportmanyofthestrategy sotheraims. Increasedaccessibilitytofinancialsupportandadvice,willcontributetoareassuchas preparingforlaterlifeandsupportingthoseinfinancialdifficulties.inadditiontotheseaims, thestrategy sspecificaimtomaketheconsequencesofconsumer sdecisionsclearershould bepraisedparticularly. Responsiblelendingshouldbeprioritisedoveraccessibilitytocredit. However,itisconcerningthestrategysuggestsincreasingtheaccessibilityofcreditforthose withpoorcreditrecordsandvariableincomes.whileitisimportantthoserequiringcredit areawareofthemostappropriatetypeandthecostsinvolved,accessibilityshouldbe restrictedwherelendingwouldbeirresponsible.affordabilitychecksareinconsumer s interests,protectingthemfromtakingoutdebtstheywouldnotbeabletorepay. Predominatelybudgetingshouldbeusedasatooltoavoidtheneedforcredit.

10 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org Whatisyourviewoftherecommendationsforactionrelatingtoease andaccessibilityoffinancialservices?howcouldtheybeimproved? CAPsupportstakingactiontohelppeopleunderstandtheconsequencesoftheirchoices. Makinginformedchoicesisanessentialpartoffinancialcapability.Itisgoodthestrategy planstodothisbynotonlyencouragingpeopletoconsidertheirchoicescarefully,butalso makingiteasyforthemtodoso.aprisoftenconfusingtocustomersanddoesnot representthetruecostofcredit,particularlyforshortztermproducts.additionally,upfront informationontheconsequencesofmissingpaymentsisverywelcome. Thereislittleawarenessoffinancialadviceservices. Accessibilityofadviceserviceshasimprovedgreatlyinrecentyears,withonlineand telephonebasedservicesallowinglargenumberstoaccessadvice.ithasbeenencouraging toseethemoneyadviceservice stelevisionadvertisements,butknowledgeofthe availabilityofadviceisstilllow.itiscommonforclient storeporttheydidn tknowanyone couldhelpthemwiththeirdebtsbeforehearingaboutcap.withwidespreadmedia promotionofcreditproducts,suchaspaydayloansandconsolidationloans,capwould encouragethestrategytouseprominentadvertisementstopromotedebtmanagementand financialeducationservicessoconsumersareawareofalltheiroptions.creditorsalsohave akeyparttoplayinthis,asrecognisedinthestrategy.creditorshavedirectcommunication withthoseinfinancialdifficulty,andthereforehavetheabilitytodothemostfarzreaching signposting.capisgreatlyencouragedbythenumberofcreditorsthatdoproactively promotefreeadviceservices,andwouldencouragethestrategytourgemoretodoso. Accessibilitygoesbeyondreachinglargenumbersofpeople. InCAP sexperience,whenclientsapproachusfordebthelptheyarecompletely overwhelmedbythefinancialsituationandhavebeenunabletogetontopofitthemselves. Itisgoodthestrategyaimstotakeactiontoprovideappropriateindependentadvice,but CAPwouldencouragetheMoneyAdviceServicetoensurethisincludessufficientintensive supportservices,especiallyforthemostseverelyindebtedandmostvulnerable. 17. HowfardoyousupporttheStrategy saimsinrelationtoinfluencing socialnorms? Socialnormsareapowerfulinfluenceonactions,butcanbeovercome. Itisgreatthestrategyisaimingtoengagewiththesocialcontextinwhichfinancialdecisions aremade.understandingthiscontextwillenablesocialnormsthatareatoddswithanyof thestrategy saimstobecounteracted.whilstpeoplearesurroundedbymessages encouragingthemtospendandborrow,thestrategyshouldbeencouragedthatcaphas succeededinpromotingcounterculturalmessageswithmanyofit sclients. AfterdoingtheCAPMoneyCourseIrealisedthatwewerestrugglingtomakeendsmeet becausemyhusbandgetsvariablewages.wehavenowstartedsaving,puttingregular, smallamountsasidereadyforthemonthswhenmyhusband sworkisslack.

11 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org Whatisyourviewoftherecommendationsforactionrelatingto influencingsocialnorms?howcouldtheybeimproved? Peopleareopentochangeiftheyunderstandthereasonsandbenefitstothem. Whilepeoplemaybemoresusceptivetochangingtheirbehaviourpatternsatkeylife events,capfindspeoplearewillingtomakechangesoncetheyunderstandthereisa problemandunderstandthebenefitstothemofdoingthingsdifferently.forinstance,cap hasbeenlargelysuccessfulinencouragingclientstosavefor,andstaywithintheirmeans for,theirchristmasshopping.inaddition,caphasalsobeeneffectiveinpromotingtheuse ofcashinaincreasinglycardzbasedsociety.infact,theuseofcashisakeyprincipletaught onthecapmoneycourseandonaverage53%ofdelegatesliveoncashafterattendingthe course.thekeyisempoweringpeoplethroughfinancialeducationsotheyfullyunderstand andconsidertheconsequencesoftheiractions,andthencontinuetomakeinformed decisions. 19. HowfardoyousupporttheStrategy saimsrelatingtoevidenceand evaluation? Usingevidencetomeasurethepositiveimpactsandcosteffectivenessofprogrammesis important,asdiscussedintheresponsetoquestionfive. 20. Whatisyourviewoftherecommendationsforactionrelatingto evidenceandevaluation?howcouldtheybeimproved? Evaluationandimpactassessmentswillnotbepossibleforallprogrammes. CAPconductsinternalevaluationsofthedebtmanagementservicesprovided.However,itis moredifficulttoconductanimpactevaluationofthecapmoneycourse,asthisinvolvesa onezoffcontactwithadelegatewithimpactsoverthelongerzterm.therefore,apartfrom initialdelegatesatisfactionsurveys,littleevaluationhasbeendone.inlightofthis,the strategyshouldbecautiousaboutpurelydirectingfundingwhereprogrammeshavebeen proventowork,asforsomebeneficialprogrammesthiswillnotbepossible. 21. Howwouldyourorganisationliketobeinvolvedinfurtherdevelopment ofthestrategy? Asanorganisation,CAPispassionateaboutliftingpeopleoutofdebtandpoverty.Todo this,akeypartoftheservicesofferedareaimedatincreasingfinancialwellbeingand capability.thisstrategyhasmassivepotentialtoimpactthousandsoflivesacrosstheuk, andbringrealchangetothefinancialsituationsofmanyofthemostvulnerable.itishoped theknowledgecapcancontributetothestrategyfrommanyyearsexperienceworkingin thefinancialeducationanddebtmanagementindustrywillofferavaluableinsight.asa result,capiseagertocontributetothefurtherdevelopmentofthestrategyasneeded, whetherthroughfurtherconsultationorinformationontheprogresscapservicesare alreadymakinginthisarea.

12 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october Whatroledoyouseeyourorganisationplayingintheimplementationof thestrategy? CAPisactivelyworkingtoincreasefinancialcapabilityacrosstheUK.Sharingmanyaimswith thestrategy,andasaproviderofdebthelpandfinancialeducationcourses,capisalready involvedindeliveringmanyoftheactionsproposedinthestrategy.overthespecifiedtimez period,capaimstoexpandprovisionofhighqualitydebtmanagementandempowermore localchurchestorunfinancialeducationcoursesintheircommunities.cap smodelis resourceintensive,offeringafaceztozfaceserviceandwidersupporttoclients.therefore, CAP sroleisverymuchaspartofamixedlandscapeofproviders.additionally,capisalso focusingontacklingthewidercausesofpovertyandfinancialdifficulty.peoplehave complexlives,anddebtisrarelyasingularproblem.toaddressthis,capisalsorunning101 CAPJobClubsandpiloting21CAPReleaseGroups,tohelpthosewithdependencies. ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 12

13 CAP sofficialresponsetothenewfinancialcapabilitystrategyfortheuk:october2014 Requestsforfurtherinformation ThisresponsehasbeenproducedbyRachelGregory,ExternalRelationsAnalystfor ChristiansAgainstPoverty,withcontributionsfromDanielFurlong,NationalGrants Manager. Forqueriesandrequestsforfurtherinformationpleasecontact: RachelGregory ExternalRelationsAnalyst Disclaimer: Although care is taken to ensure that this information is accurate and correct at the time of writing, Christians Against Poverty cannot accept any responsibility for mistakes or omissions. Christians Against Poverty excludes to the extent lawfully permitted all liability for loss or damage arising from reliance upon this information. Copyright 2014 Christians Against Poverty. All rights reserved. This material may not be reproduced for any purpose without first obtaining written permission from Christians Against Poverty. capdebthelp.org find us on Registered Office: Jubilee Mill, North Street, Bradford, BD1 4EW Registered Charity No Charity Registered in Scotland No. SCO38776 Company Limited by Guarantee, Registered in England and Wales No CAP is authorised and regulated by the Financial Conduct Authority. Registration number Lifting people out of debt and poverty ChristiansAgainstPoverty JubileeMill,NorthStreet,Bradford,BD14EW capuk.org 13