Vulnerability: a guide for lending

vulnerability - a guide for lending FRONT COVERYesterday saw the launch of Vulnerability: a guide for lending; an important new report aiming to help firms better identify and support customers with mental capacity limitations during credit applications. The report is produced by the University of Bristol’s Personal Finance Research Centre and funded by the Finance & Leasing Association and UK Cards Association. It is supported by the Trust and key trade bodies for financial services – FLA, BBA, CML, CSA, BSA, UK Cards Association.

Mental capacity limitations can result in customers having significant problems with understanding, remembering, and evaluating information about credit products they are applying for, as well as communicating a decision about this.

Where not identified, these can result in detriment including borrowing, lending and contracts that results in ‘later downstream’ financial difficulty and problem debt. We see the implications of this every day at National Debtline, and are keen to work closely with financial services and other sectors such as telecoms (e.g. when signing customers up for mobile phone and other telecoms contracts) and motor finance (e.g. when entering car leasing agreements) to improve early identification and prevent the build-up of debt.

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An important call-to-arms on financial exclusion from the House of Lords

shutterstock_258751613For nearly a year, the House of Lords Financial Exclusion Committee has been taking evidence from charities, industry representatives, regulators and Ministers on this important topic. The resulting report, published at the weekend, is an impressive body of work – and provides the call-to-arms in Westminster that this crucial agenda needs.

With more than 1.7 million people still ‘unbanked’, 40 percent of the working age population having less than £100 in savings, and those on the lowest incomes continuing to pay a significant poverty premium, financial exclusion in the UK is a problem of significant scale.

Last July, I was pleased to be invited to be among the first witnesses to appear before the Financial Exclusion Committee, chaired by Baroness Tyler of Enfield. Here at the Trust we have been following its work closely since (read our thoughts in full in our written evidence here), and there is much in the report to welcome.

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It’s time for an expanded focus on a broader range of vulnerable circumstances

background image plain croppedThe Trust’s chief executive Joanna Elson blogs on the evolving vulnerability debate and our new e-learning on supporting customers with a serious illness.

In recent years the Trust has increasingly focused on the issue of vulnerability, working with a growing number of creditors to help them to better support customers in vulnerable circumstances.

The British Bankers’ Association’s Financial Services Vulnerability Taskforce, which I was pleased to serve as Chair, made a significant contribution towards focusing the financial services industry on this important agenda, building on and amplifying the FCA’s Occasional Paper on the subject.

I am pleased to say that demand for the Trust’s training for collections and other creditor staff on how to support customers in vulnerable circumstances has never been higher, and we are seeing positive signs of a growing appetite for change in other sectors – and utilities in particular.

This debate is again being moved forward today, with the launch of Vulnerability: a guide for debt collection – an important new contribution from Chris Fitch and Colin Trend for the University of Bristol’s Personal Finance Research Centre.  Supported by the Finance & Leasing Association and UK Cards Association, the guide is an evolution of the widely-used ’12 steps’ guide first published by the Money Advice Trust and Royal College of Psychiatrists – and throws a welcome spotlight on a broader range of vulnerable circumstances that can affect people. Read more

 

The time has come for fundamental #bailiffreform

Event photoThis week sees launch of Taking Control – a new joint campaign for further bailiff reform from the Money Advice Trust and our friends at AdviceUK, Christians Against Poverty, Citizens Advice, StepChange Debt Charity, The Children’s Society and Z2K.

After an early stint on the Today programme – part of a welcome splash in the media including coverage on BBC News and in several national newspapers – I was pleased to help launch the Taking Control campaign at an event in the House of Commons yesterday afternoon, kindly hosted by Julian Knight MP.

This is the first time in my memory that these seven charities have worked together in such a co-ordinated way on a public policy issue. All seven organisations see the impact that bailiff action continues to have on our clients, week in, week out – and I am delighted that we have been able to come together to call for the fundamental reform that people in debt need. Read more

 

#FeelsLikeChristmas and the difference that free debt advice can make

Feels Like Christmas Twitter imageLast week the Trust launched our #FeelsLikeChristmas campaign, aiming to highlight the real difference that free debt advice can make at what we know can be a challenging time of year financially for many households.

The campaign includes a #FeelsLikeChristmas video with National Debtline clients sharing their experiences of getting free debt advice – and you can hear the very real relief in their voices.

Money worries can have a huge impact on your life at any time – but our research found they are putting Christmas at risk for up to five million people, showing what an extremely difficult time of year this can be. This is also, of course, a busy time of year – and it is easy to see why many people don’t want to deal with financial problems in December.

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A spotlight on young people, mobile phones and financial difficulty

Earlier this year the Money Borrowed YearsAdvice Trust launched Borrowed Years, our new campaign to raise awareness of free debt advice amongst 18 to 24 year olds – a group that we know is under-represented amongst the people that contact National Debtline and other agencies for advice.

So far the campaign has generated more than 160 items of media coverage, and its launch led to the busiest day to the National Debtline website in 2016 so far, including visits to our tips for 18 to 24 year olds.

In our first spotlight in August, we looked at young people’s experiences of credit, debt and borrowing – finding that 37% of 18 to 24 year olds are already in debt, while around half are regularly worrying about their personal finances. Our second spotlight focused on borrowing from family and friends and the vital ‘safety net’ that this provides for many under 25s.

Today we launch our third and final spotlight, looking at this age group’s experience with mobile phones – a near-necessity for all, and unfortunately, a source of financial difficulty for some.

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We must do more to help under-25s avoid and tackle problem debt

Borrowed YearsToday the Money Advice Trust has launched Borrowed Years – a new series of ‘spotlight briefings’ exploring young people’s experiences of credit and debt.  Our research has found that many young people are building up debt and worrying about money in their first few years of adult life, but far too few are seeking advice when they fall behind.

Last year just 12% of callers to National Debtline were aged 18 to 24 – an experience shared by other advice agencies. And yet research by the Money Advice Service has shown that this group makes up 21% of the UK’s over-indebted population – equating to 1.8 million young people under 25 falling into financial difficulty as they take their first steps into adult life.

We must all do more to close that gap, and ensure that more young people receive the free advice they need. Read more

 

Useful new evidence on the link between debt and mental health

Money on your mindToday sees the launch of the Money and Mental Health Policy Institute’s new report – Money on your Mind – revealing the relationship between financial difficulties and mental health problems.

Money and Mental Health has had a busy first few months since it was launched by MoneySavingExpert.com’s Martin Lewis, and its director Polly Mackenzie and her team have put together an excellent first report that throws a welcome spotlight on this crucial issue.

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Welcome to our new blog

At the Money Advice Trust we help people across the UK tackle their debts and manage their money more wisely. This new blog will share our views, insights and experiences from the frontline of the debt advice sector, as well as our wider policy and insight work.

Last year, we helped more than 1.35 million people through National Debtline and Business Debtline – our free, independent and confidential advice services – and our Wiseradviser training programme for advisers working in other charities across the UK.

This year – our 25th – we are building on this work, and will be using this blog to share news and developments as we continue to help more people, more effectively. Read more