Social tenants across the UK on benefits are risking their health and financial wellbeing as they try to cope under austerity, according to the latest reader survey by money management magazine Quids in! published this week.
Among working age tenants not in full-time employment, it found that on account of money worries:
- 44% were skipping meals (average: 35%)
- 51% were turning off heating despite being cold (average: 44%)
- 58% felt frightened, anxious or depressed (average: 47%)
- 28% felt physically ill (average: 21%)
- 63% did not save for unexpected expenses and just 17% use a savings account
- 67% had no home contents insurance (average: 59%)
Quids in! editor Jeff Mitchell said: "When people go hungry and cold because they're worried about the bills, of course physical illness or mental anxiety will follow. This group is the same as the one that will move onto Universal Credit over the coming years and the idea they can cope with a minimum six-week wait is a fantasy. Austerity must be reconsidered as the worst off are sitting on a timebomb. It's a question of whether their health or finances will be ruined first."
FIVE YEAR PICTURE
It is the third national survey, run alternate years by the Social Publishing Project who publishes Quids in! magazine and was sponsored by insurance company Aviva and tenant services firm Mears. It polled just under 600 social tenants over December 2015 and January 2016, asking a range of lifestyle questions about money, hardship, attitudes and the interventions that made a difference.
As with previous surveys, the 2016 report highlights the impact of money worries on tenants’ wellbeing as indicators of significant hardship, including how relationships with friends and family who might otherwise be a source of support have been affected. A review over five years was now possible and the findings were not all bad news. Across all tenants, respondents appeared to be more on top of debts and bills and there was some indication that life for social tenants across the board was slightly better than in 2014, although generally not as good as in 2012:
- 47% felt frightened, anxious or depressed (52% in 2014, 45% in 2012)
- 35% skipped meals (37% in 2014, 33% in 2012)
- 42% went cold (51% in 2014, 44% in 2012)
The so-called good news that numbers of people reporting problems with keeping on top of bills or debt relates only to an improving trend. The numbers remain a concern and, in the context of UC and early indicators of high failure rates (around debt and arrears), should be considered fragile:
- 18% were in rent arrears
- 46% had fallen behind with bills
- 30% struggled to maintain debt repayments
There was also a slight increase in numbers of people turning to store cards, catalogues or weekly payment stores. Numbers using store cards or catalogues went from 15% in 2014 to 16% in 2016. Eighteen per cent said they would turn to a store offering credit to replace white goods valued at £400, such as a washing machine.
Angela Clements, founder and CEO of Fair for You, the alternative weekly loans company said: “This report echoes many of the findings from our own, recent social impact report. We see many lower income families who don’t have access to savings to cover relatively minor emergencies. We have lots of customers, including many in work, who enjoy being able to spread the payment over a few months, and value the flexibility and access to quality affordable brands.
“We too found that worrying about household bills can often lead to symptoms of stress, anxiety or depression, and the fact that an affordable loan from us for a washing machine can help relieve those symptoms, is something I find quite difficult to understand in modern Britain. It cannot be right that people have to make choices about whether to spend either on heating their home, or food for their children, because of the amount taken out of their home by the high cost credit providers.”
FEELING QUIDS IN!
Quids in! magazine was also better received among working age readers not in full-time work, with 54% valuing the fact it made them feel less alone, 36% saying it made them more mindful of their finances and 24% saying it helped them realise they needed help. Among all readers, 89% gave it the thumbs up as useful to some degree, with 17% saying it was useful ‘all the time’.
Across all readers, a third (33%) said they think more carefully about their finances after reading the magazine. Eighteen per cent said they would now think twice about high interest loans and 14 per cent reported understanding more about their benefits or pensions. Almost half (45%) felt reassured they were not alone with their financial worries, important when these lead many to feel frightened, anxious and depressed. Almost one in five (18%) said Quids in! triggered the realisation they needed help, 8 per cent decided to find help and 6 per cent accessed it.
Among working age readers not in full-time work, the approval rating was higher. More than half (54%) realised they were not alone, 36 per cent were more mindful of money after reading, and 21 per cent would think twice about high interest borrowing. The magazine prompted 21 per cent of this group to realise they needed help, 12 per cent decided to get help and 7 per cent took action.
With all eyes in the social housing and financial capability worlds increasingly focused on Universal Credit (UC), Quids in! publishers Social Publishing Project (SPP) honed in on the triple threat ‘3 Bs’: banking, budgeting and being online.
While only two per cent of respondents were already on UC, 64 per cent were working age and not in full-time employment, so highly likely to qualify for the new benefit which will continue to roll out to anyone claiming housing benefit, out of work benefits, income support or tax credits. 67 per cent were already on Housing Benefit, which will come under UC for claimants of working age.
One in five (21%) still have no access to the internet, creating a challenge for claimants, DWP and local support services as UC is ‘digital by default’. Only 41 per cent had a PC at home they could use and 43 per cent had a smartphone, although it is thought unlikely an initial claim can easily be made using a phone.
Nine in ten readers said they struggled with their money to some extent and 16 per cent considered themselves facing ‘serious financial problems’.
Five per cent of respondents said they had been turned down for a bank account because they were told they did not have adequate ID. This is reflected in an FCA paper, Access to Financial Services in the UK, launched earlier this year that said poor access left 1.5 million consumers without a bank account. Forty per cent of all readers said they did not use a bank account, rising to 44 per cent among likely UC claimants.
Receiving UC will require claimants to have a relatively mainstream account, although many Credit Unions have adequate facilities, access to nationally available banking services is an indicator of preparedness for UC. Managing direct, monthly payments, where tenants can utilise direct debits and second cash or ‘jamjar’ accounts, will be essential for good budgeting for many. It seems trust in the banks has yet to return to 2012 levels, although Credit Unions have experienced an upsurge from 4 per cent four years ago, to 6 per cent in 2014, to 11 per cent this year.
There is a minimum six-week wait before the first UC month’s payment is paid. Evidence is emerging that the lag is at least seven weeks and any glitch in the system or requirement for new claimants to provide further information can cause delays of weeks at a time. In March 2016, NFA and ARCH found 79 per cent of UC claimants were in arrears by their first payment. Facilities like advances and hardship payments take weeks to organise, so tenants will need to fall back on savings or charity, like foodbanks. The Quids in! research found 63 per cent of working age people not in full-time employment did not save for unexpected expenses and just 17% use a savings account.
Readers revealed their biggest concern was ensuring they were accessing their full benefit entitlement, where almost half (47%) said they sought advice on this. Debt advice was still required by over a third (36%) and help with budgeting was found by 31 per cent. The need for welfare rights advice will undoubtedly continue to rise as Universal Credit is rolled out and the report called on advice agencies and other stakeholders to prepare for this.
Respondents’ turned to their family and friends before formal sources of expert advice with 37 per cent asking around for information. GPs were the first professionals approached (just over 31%) followed by Citizens Advice (just under 31%). The researchers questioned the quality of advice that people would receive from non-specialists, whether family, friends or even a GP, and called on the money advice sector to forge closer links with health professionals to ensure debt advice was prescribed sooner than drugs when the root cause of, say, a mental health issue, was money worries.
It follows then that the usefulness of the advice was found to be patchy. Just over one in five (22%) said it solved their problems, while 55 per cent said it only helped a little, reinforcing the need for specialist advice to be available at the point of asking.
The report presents an overview of social tenants and their money worries, their resilience and the interventions that work or could be improved. With Universal Credit rolling out, it is unlikely there has been a more pressing time to respond to tenants’ financial needs.
Read the Full (20-page) Report here.