On the margins:
financial exclusion,
debt & social housing
Dawn Prentice
HCI Public Affairs Manager
DAWN PRENTICE
HCI PUBLIC AFFAIRS MANAGER
ON THE MARGINS - INTRODUCTION
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Personal debt casts a giant shadow over low income
communities & social housing
Shared concern brought Compass, Trident Group & Human City
Institute together for research
Thank Stella Creasy MP for unflagging campaign against highcost credit & for writing ‘On the Margins’ Foreword &
supporting our research
Joe Cox of Compass & John Morris of Trident, questions at the
end of the session
Joe Cox
Director of Campaigns
Compass
JOE COX
COMPASS CAMPAIGNS DIRECTOR
ON THE MARGINS - AIMS
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Snapshot of how high-cost lending affects low income
households (incl. social tenants) & perpetuates financial
exclusion
Open-up debate about functioning of high-cost credit markets,
social justice, housing policy
Put forward general policy solutions & some for the social
housing sector
ON THE MARGINS - APPROACHES
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Findings from Compass ‘End Legal Loan-Sharking Campaign’
In-depth interviews with 252 social tenants
Case studies of social tenants in debt from Trident Inclusion
Money Advice Centre
Review of UK personal debt, financial exclusion, likely effects
of ‘austerity economics’
ON THE MARGINS - PERSONAL DEBT
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£1.5 trillion = 100% GDP & 3 times that 20 yrs ago
OBR growth forecast depends on personal debt increasing by
40% by 2015 to £2.1 trillion
Personal debt predicted as 175% household income from 160%
over next 5 years
Unsustainable: dependent upon expanded home
ownership/increase in ‘sweating housing assets’
ON THE MARGINS - GROWTH IN DEBT
ON THE MARGINS - DEBT & EXCLUSION
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Debt major issue for low income households - lower access to
affordable credit so pay ‘poverty premium’ on high-cost lending
One fifth of low earners have ‘heavy’ debt burden
1 in 3 have no savings
Social tenants 6 in 10 of financially excluded
ON THE MARGINS - HIGH-COST CREDIT
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Withdrawal of High Street banks from ‘high risk’ (low income)
neighbourhoods
Low income households depend on high-cost credit of
sometimes 1,000% interest
Pay-day loans, rent-to-buy retail credit, pawn-broking & illegal
money lending all on rise - fourfold increase in pay-day loans,
threefold increase in pawnbroker business
ON THE MARGINS - GENERAL RECS
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Need for wage & benefit levels to be higher (‘Living Wage’
rather than min. wage) - v. unlikely
Universal right to a basic bank account, roll-out of affordable
credit schemes in all communities
Passing of a Community Reinvestment Act
Financial regulators new powers to regulate high-cost lenders
& a levy on excessive profits
John Morris
Chair of HCI
JOHN MORRIS
TRIDENT GROUP CEO & HCI CHAIR
ON THE MARGINS - TENANT EXPERIENCES
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Survey of Trident tenants showed many ‘living on the edge’ with
relatively high debt to income ratio, reliant upon high-cost
credit
Debt repayments a large part of weekly budgets
One third of Trident’s tenants have had an ‘awful’ experience of
high-cost lenders
Half of Trident’s tenants experienced harassment of varying
degrees
ON THE MARGINS - TENANT PRIORITIES
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50% want furnished tenancies (including white goods) to
reduce need to seek credit
Over one third want social landlords to provide employment
directly, create employment, training
One third want social landlords to offer short-term loans
1 in 5 ask social landlords to help tenants start businesses &
social enterprises
ON THE MARGINS - RESPONSES BY HAs
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Housing Associations already provide a range of money advice,
affordable credit options:
 HAs invest £160M annually
 NHF’s ‘MyHomeFinance’
 Trident Money Advice Centre
• Trident
MAC helps 200-300 local people annually, increased
tenants’ incomes by £312k last year and helped deal with £800k
of tenants’ debts
ON THE MARGINS - TRIDENT’S RESPONSE
• Fit-for-purpose vehicle - Trident Inclusion:
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Money and debt advice, affordable credit
Mortgage rescue & home owner support
Furnished lettings
Support for vulnerable groups
Improving social mobility & life chances
Research & development of good practice
ON THE MARGINS - RECOMMENDATIONS
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Roll-out of ‘MyHomeFinance’ nationally
All social landlords should provide some money & debt advice
services
NHF & CIH to further develop pooled services & knowledge
bank on financial exclusion initiatives
Greater use of furnished tenancies
Increased community asset transfer to tenants
HARD COPIES OF ‘ON THE MARGINS’ REPORT
AVAILABLE & at
www.compassonline.org.uk
www.humancity.org.uk
QUESTION TIME…
On the margins:
financial exclusion,
debt & social housing