Financial Inclusion

Homeless people are often severely affected by not being able to access financial services. This can be a stigma and a barrier to moving on. However there are many ways that people can be supported to become more financially included.

Context

Many people, particularly those on low incomes, can’t access mainstream financial services. This financial exclusion can severely affect homeless people. For example, the lack of a bank account can be a barrier for people seeking work or trying to access the private rented sector. Lack of a fixed address, poor credit history, having to deal with other issues or not having correct Identification are usually the main barriers. Debt may either be cause or a consequence of homelessness or unstable accommodation.

Many homeless people often operate a cash economy. The consequences of operating using cash only include vulnerability to loss or theft and being unable to make savings (such as via direct debits or using internet purchases). It may also mean that people are more likely to use the alternative credit market, paying high interest on loans. If people have no account for money to be paid into it can be a barrier to entering work.

In 2004 the government set up the Financial Inclusion Taskforce to oversee a range of measures. The Government’s Action Plan for Financial Inclusion, sets out the Government’s key goals for financial inclusion. They are about ensuring that everyone is enabled to manage their money, plan for the future and cope with financial distress.

Homelessness organisations play a role in offering money advice and support with budgeting. The Survey of Needs and Provision found that debt and financial advice services are provided in 98% of projects.

Solutions

The Joseph Rowntree Foundation has carried out a study to review policies and practices aimed at reducing financial exclusion. They set out how the solutions fall into two elements: supporting people to have good financial decision-making and supporting access to products and services. There are a number of ways that organisations are helping people to open basic bank accounts, access affordable credit and get face-to-face money advice.

Housing associations often play a key role in introducing financial service to vulnerable people.The National Housing Federation has a series of resources that support providers to give tenants fairer access to financial services.

Financial Education

Though all Citizens Advice Bureaux deliver money advice as standard, not all are involved in financial education. However, over 50% of bureaux in England and Wales deliver some level of financial capability education in communities, up from only 20% two years ago. Many more are trying to identify the resources to do it. Most deliver financial education either by means of group sessions direct to service users, or by training frontline workers in financial inclusion issues so that they can understand financial problems faced by their service users and refer them more effectively. They can be tailored to the needs of recipients and cover topics such as banking, budgeting, credit, saving, debt and income maximisation. Contact local bureaus to see if it is available.

Resources

The University of York carried out research about Homelessness and Social Exclusion in 2005. 

The New Policy Institute has produced a Financial Inclusion Snapshot in 2007.

Transact is the national forum for financial inclusion. This is a UK-wide network for people committed to practising and promoting financial inclusion.

There are 14 regional financial capability forums supported by Citizens Advice across England and Wales. They are strongly partnership oriented, with a diverse membership of over 600 organisations mainly from the voluntary and public sector, though also frequently attended by corporate funders. Membership is free. Being a member gives access to quarterly meetings, scope for learning about best practice and the latest developments in the field, opportunities for partnership in joint bids, a range of funding opportunities that are run through the forums, free access to materials and access to free 'train the trainers' courses in how to deliver financial education. For more details of 'forum leads' to contact in your area, and of Citizens Advice financial capability work in general, click here.