Financial Inclusion Strategy
Financial Inclusion Strategy 2010-2013
A Summary
Financial Exclusion - What is it?
Financial exclusion can be defined as 'the inability, difficulty or reluctance to access appropriate so called mainstream financial services'. The causes of financial exclusion are varied and complex and can range from an inability to access mainstream banking services, poor financial literacy, through to powerful cultural influences.
Who is at risk?
Research has identified those at highest risk of being financially excluded and these include:-
- The unemployed
- Those on means- tested benefit
- The sick and disabled
- Single pensioners
- Lone parents
- Some minority ethnic communities
"Eight out of ten financially excluded people live in socially rented accommodation."
Who do we need to target debt and money advice to?
- Tenants in the early stages of rent arrears
- Applicants excluded from housing registers due to previous rent arrears
- Those enquiring about low cost home ownership
- Tenants experiencing significant changes in circumstances e.g. moving out of the parental home; loss of employment; divorce, illness or death in the family; new children; change or cessation in eligibility for benefits; start up of a business; going in or coming out of prison.
Hafod's Strategic Context
Hafod has stated its commitment to financial inclusion within the following high level corporate aims:-
- To Increase financial inclusion levels amongst our tenants
- To review mechanisms to access advice/support
- To formalise arrangements with Credit Unions, voluntary sector partners and others
This new strategy seeks to build on our previous financial inclusion work and to provide greater clarity in respect of how we shall deliver an effective and all encompassing financial inclusion programme.
Financial inclusion is a high priority for both the UK and Welsh Assembly Government. In 2009 the WAG launched its new 3 year Financial Inclusion Strategy for Wales to promote financial inclusion and tackle over-indebtedness. The strategy focuses on 5 core themes:
- 1. Access to mainstream financial services
- 2. Access to affordable credit and loans
- 3. Accessible financial and debt advice
- 4. Financial capacity/literacy
- 5. Income maximisation
What we hope to gain
By developing a financial inclusion strategy we would expect the following benefits:
- Reduced rent arrears, and more income generated for the Association
- Reduced abandonment of properties and so less spent on voids - every tenancy kept from failing will save the Association approximately £4,500
- Reduced homelessness as less tenancies fail
- More settled communities as there is less debt and less failed tenancies
- Financial gain for our customers through better money management, more disposable income, and a decrease in the likelihood of losing their homes
Existing services to tackle Financial Inclusion
The Association has developed a number of financial inclusion initiatives to tackle debt and financial exclusion. In particular, we provide comprehensive information on financial matters via
- a range of financial literature within our letting packs.
- regular articles in our Hafod's Own newsletter
- a Money Matters section on our website.
Improving Access to Mainstream Financial Services
Home Contents Insurance - we promote My Home Contents Insurance which is specifically designed with tenants in mind and allows tenants to pay weekly. There are currently 59 tenants using this scheme.
Providing affordable credit and savings
Credit Unions - we are committed to working with local Credit Unions to promote the take up of membership, regular saving, and access to affordable credit. We currently support 3 Credit Union local deposit points in Rhydyfelin, Thornhill (Cwmbran), and Fir Tree Drive (Treharris). Our work in Rhydyfelin is particularly notable with 35 adults and 17 children in membership with 26 loans issued.
We have also used targeted campaigns, including financial incentives to encourage membership, as well as supporting a range of Credit Union initiatives including Christmas Saving Clubs, Young Savers Clubs etc
Moneyline Cymru - we are an active member of the Moneyline Cymru Steering Group which was set up in 2008 to address a whole spectrum of financial inclusion issues including lack of access to affordable credit, bank accounts, money advice and savings.
'Moneyline Cymru is a Community Development Institution (CDFI), a responsible and sustainable social enterprise which provides loans, financial planning and debt advice to financial excluded people who might otherwise fall prey to high interest, doorstep lenders or illegal money lenders.'
Illegal Money Lending Unit - we were part of Community Housing Cymru's drive to raise awareness of Loan Sharks in the hard hitting 'Don't Get Bitten Campaign'. This aimed to raise awareness of the problem as well as the help available via the new Illegal Money Lending Unit.
Improving access to financial and debt advice
DRAMA - We are a signed up member of DRAMA (Debt Redemption and Money Advice) run by the Wales Cooperative Centre. Since April 2009 we have purchased the services of a Specialist Money Adviser from CCCS to provide Debt Advice to our tenants. A total of 10 appointments are available each month.
DRAMA is due to end in May 2010 but the Specialist Money Advice Service will continue in partnership with Credit Action.
Our own housing data
We have established a number of key performance indicators to measure the success of our debt prevention work including monitoring rent arrears, by area and amount, and tenancy failure rates.
Increasing Financial Capability
Money Booklets - we have produced a comprehensive series of Money Booklets. The booklets cover a range of topics including Basic Budgeting; Making the most of your Money; The cost of running your home; Young People and Money; Debt Guidance. They aim to help people to manage their finances in the first instance, as well as providing valuable information to those who find themselves in debt.
Generic Financial Advice - we have worked with a number of partners to improve financial literacy and to bring good financial advice out into community settings.
Over the previous 2 years we worked in partnership with Cardiff Basic Skills to provide 'Mind your Money' and 'Stash the Cash' courses. We are committed to providing information and training to improve knowledge, skills and understanding of financial products and services and to improve money management. There is still a great deal more to do in this area if tenants are to better understand their current financial position, and the options available, across subject areas including budgeting, borrowing, emergency provision, protection and savings & investments.
Income Maximisation
Shelter-Cymru - We were the first Association in Wales to partner with Shelter Cymru to provide Housing Benefit Advice to our service users and we currently have a full time adviser. Over the last two years this service has assisted 391 tenants with an estimated financial gain in housing benefit, and other welfare benefit entitlement (back dated and projected forward) of £413K.
Affordable Warmth Strategy - we are committed to tackling fuel poverty and are actively upgrading heating systems and insulation levels to this end. The former includes installing SEDBUK Rated 'A' boilers and improved controls, whilst the latter includes upgrading loft insulation levels and installing cavity insulation where appropriate. We also have a rolling programme to identify properties which are energy inefficient and/or hard to heat. This programme is translated into property specific schemes to bring these homes up the appropriate SAP rating as well as offering advice on household energy costs and tariffs.
We currently provide basic energy saving advice but intend to strengthen this aspect of our work to deliver home energy efficiencies and reduced fuel bills for our tenants. In particular, through the appointment our Energy Champion we shall look more systematically at how we support tenants to better understand fuel bills, meters, fuel cost calculations, different payment options, and sources of grant. We shall also encourage tenants to change their behaviour in order to reduce their home energy consumption through more efficient, safe and appropriate use of appliances, systems and controls.
Community Initiatives - under our Community Investment Strategy we seek to deliver a whole host of affordable initiatives aimed at saving money for our tenants e.g. local Food Co-operatives; Swap Shops etc.
Strategic Approach
Our strategic direction for the next three years is as follows:-
- To review key policies, systems and procedures to ensure that our financial inclusion aims our embedded throughout the Association.
- To target limited resources, both in terms of staff time and finances, to achieve the greatest benefit and value for money.
- To focus on preventive measures including pre- and early tenancy work.
- To identify those most at risk of becoming financially excluded and provide appropriate support and services.
In Conclusion
Hafod is committed to supporting its tenants to better manage their money and maximise their income. We recognise that struggling to 'make ends meet' or having to deal with debt is extremely stressful and can lead to relationship breakdown and mental health problems. Moreover, where finance is really tight some people may seek to make savings by cutting back on essentials, such as heating and food affecting their general health and well-being.
We are aware that some tenants are more likely to be financially excluded than others and we shall draw on all sources of information available to us to ensure that we target those most at risk. This will include considering how best to support those with particular needs including those with poor basic skills and low literacy levels. Moreover, we shall carry out a full Equalities Impact Assessment of our planned programme to ensure that our services are available to all of our tenants regardless of age, disability, ethnicity, gender, religion, and sexual orientation.
For a full copy of the Financial Inclusion Strategy 2010-2013 please email enquiries@hafod.org.uk
