This article is one of four published to mark the Money and Pensions Service’s Talk Money Week 2023. (Updated in October 2024.) Its theme is ‘Do One Thing’ and Clean Slate is calling on all stakeholders to encourage people in financial hardship to take the Quids in! Future-Proof Finance Quiz. (A handy shortlink is available: qimag.uk/quiz ) This plain English survey asks 25 simple yes/no questions to generate a customised action plan with ways for participants to reduce their spending, increase their income, reduce their borrowing and increase their savings.
Money and secure housing
No one would expect a tenant without the means or skills to ensure rent is paid each month to last long in their home. It’s why many social landlords not only run affordability checks but often add a level of gatekeeping to the house-hunting process with an assessment of budgeting skills, usually presented as training. Once a tenancy is underway, however, residents can find they’re on their own. This can feel like a relief for new householders who just want to make a go of their new place. But then life happens.
So, what if there were opportunities to periodically run a scan across tenants’ finances? Not an assessment of suitability, or risk, but what if we offered help that could generate financial gains they might be missing out on? And, at the same time, caught things early while a little help would be all it took to swerve disaster? Well, that’s just what Clean Slate has been doing with Stonewater and other housing associations. It’s a game-changer that could transform relationships between landlords and tenants across the UK. One that could broaden how debt services are commissioned so non-financial advisors can join the battle to tackle domestic debt now running at £2trn and threatening to overwhelm the debt advice sector altogether.
During the pandemic, one partner asked us to deliver money guidance to tenants starting to tip into arrears. A multi-tiered service was developed, offering financial triage and coaching over three, six or 12 weeks, depending on need. With 1,000 referrals a year, we could see the impact a money guidance service (not a crisis-based debt advice service) could have. Among those in debt or arrears but not receiving advice at the start, 77 per cent were debt-free or accessing specialist support by the end, significantly truncating the usual 12-18 month lapse between falling into arrears and finding help.
1. Wobbling Wheels
There is an argument that homelessness is predictable. Research and data analysis have long-identified risk factors like mental health issues, relationship breakdown, substance abuse and unemployment. It is easy to target preventative measures at the symptoms, like evictions or even arrears, but the chain of events has started much earlier. As such, services could be commissioned to provide targeted support to vulnerable individuals and families before they face homelessness. Meaningful interventions can take place so far up the chain that individuals would not even recognise themselves as at risk, but it does require commissioners to understand the statistical risk and invest in measurement at scale to assess impact. Speaking at a Homeless Link conference on prevention in 2022, I called on attendees to link into mental health, substance misuse and family services. “We’ve found our Money Health Check process, offered on the basis of finding ways to be better off, will help us spot people for whom the wheels are wobbling but haven’t yet come off,” I said at the time. Later, however, it became clear homelessness agencies feel it’s outside their scope to support people who are not yet homeless. At the same time, mental health or family services don’t feel confident in delivering money guidance nor will they readily expend limited resources on preventing a crisis yet to manifest. There is an opportunity for financial guidance services to step in.
2. Regaining Control/ Virtuous Circles
While the red flags along the route towards homelessness can alert money guidance services to a risk of future homelessness, tackling financial problems can address those same issues. Financial difficulties strain relationships, impact people’s mental health and undermine their ability to earn, and trigger negative coping mechanisms like alcohol and drug misuse. So, money guidance interventions and coaching improve an individual’s wellbeing and resilience more than just financially. It provides them with space to breathe, take stock, consider options and make informed, unforced decisions. It is a blueprint for taking control of all elements of someone’s life.
3. Tenancy Sustainment (Homelessness Prevention)
Preventing homelessness is the least we, as a community, should aspire to. Sustaining tenancies is also a meagre ambition. If tenants can thrive, housing is more than secure, it is a foundation for success in their employment, wellbeing and quality of life. Whole families benefit, including children, who do better at school. Landlords, local authorities and over-stretched support services are stakeholders too. Financial resilience is core to this and simple measures to direct householders towards gains they often don’t know exist can be transformative. Housing and regulated debt advice will always have an important role, although generally at a crisis point, but money coaching can empower tenants to avoid problems and develop the skills to proactively manage a tenancy. As we reveal in our Quids in! New Tenants Guide, if tenants think bigger than bills, they can do more than keep a roof over their heads. They can free up a budget to keep a home warm and damp-free, well decorated and energy-efficient.
Empowering individuals on low incomes through financial guidance and coaching is a crucial step towards improving their mental and general wellbeing. By reducing financial stress, fostering a sense of security and control, enhancing decision-making abilities, and improving relationships, financial literacy acts as a catalyst for positive change. Ultimately, this approach can contribute to suicide prevention by mitigating the factors that exacerbate mental health issues and despair, ultimately leading to a healthier, more resilient society. The practical benefits of healthier budgets immediately make healthier lifestyles achievable.
*Clean Slate helps people on low incomes become better off. We do this by helping them re-organise their money and maximise their income, find work or better work, and get online. Quids in! is our money guidance initiative and in 2024, its materials – magazines, guides, personal finance emails and interactive tools – reached 175,000 people on low incomes across all nations of the UK. People we engaged one to one enjoyed financial gains on average of £1,328.
Image: Andrew Neel / Unsplash
