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Angela Clements blogs about how ethical credit alternatives such as Fair for You will benefit not just those on low incomes, but everyone

I have lived and worked in Birmingham all my adult life, the last 10 years almost exclusively providing affordable credit as an alternative to high cost credit, firstly running a credit union and then Fair for You.

It’s a generalisation but on the whole our customers are women, in lower income households, with some caring obligation and in part-time work.  ‘Managing mums’ is a term that has been coined in recent months. I would say these women are sassy, switched on, entrepreneurial, hard working, and not really managing very well at all. Or at least they are until something goes wrong when they need access to fair, affordable and well- designed credit.

I have sat in rooms over the last 10 years, hearing my customers talk about the need for financial education, budgeting and debt advice.  I felt strongly throughout those years that they need better alternatives to the credit options that are currently available.

In 2014, a group of us spent hours listening to mums of younger children in Northfield, Birmingham tell us very frankly and openly about their experience with high cost credit. I went in there thinking I knew what Fair for You would look like, and I came out knowing what it had to look like.

Some amazing people and organisations have backed our work over the last three years, but we never lost sight of what we were told, and we delivered what those people needed.

High cost credit isn’t just expensive – all versions of high cost credit have that in common. But the other common trait is that it is designed for the benefit of the lender, and to take maximum extraction from the customers’ financial household.

The term the ‘poverty premium’ is used to describe  the additional costs  low income households – in other words those who have less consumer power – have when purchasing essential goods and services. Whilst the amount of that premium fluctuates in various situations, it is always consistent that the lion’s share is made up of high cost credit i.e. the additional cost of using credit when faced with emergencies.  And the same households need credit when hit by emergencies, as they have less insulation and resilience to what to other people would be relatively minor emergencies.  There seems little point in measures to address poverty in the UK, without removing the poverty premium.

On 22 March we release the third social impact report relating to the work of Fair for You, a national challenger to high cost credit that directly responds to all of the needs we identified in our research. Now I don’t just have the voices of the mums who came to all of the sessions we ran, I have thousands of voices of customers whose financial situation has been changed because they have access to an alternative.  They prove every day, that they don’t need education and advice, they need better alternatives.

Fair for You is on line, available seven days a week, customer focused and a modern solution that uses multi-media communications including social media. Put simply, credit delivered with dignity and respect, designed to meet the lives of mums – and anyone else – who juggles, struggles and are not really managing at all.

And our customers love it – we are so proud to be rated among the highest financial services in the UK according to Trustpilot.

Please check us out and if you can support our work and our drive to change the way we lend to lower income households, then we would love to talk to you.

Angela Clements is the CEO  of Fair for You

Read Centre for Responsible Credit’s Social Impact Report



Work is failing to provide the majority of working single parent families with the income they need, with two thirds (67 per cent) saying finances are a constant struggle at best and one in ten saying they are not coping financially [1], a new report from Gingerbread has found. More than 2,000 single parents shared their experiences in an online survey and 23 took part in one to one interviews with the charity for the report, Paying the Price: The long road to recovery.


Gingerbread’s research finds little evidence of an economic upturn in the lives of single parents in work or those desperately trying to break into a tough jobs market.  Single parents describe their battle to overcome the strains of low-paid work – with new findings showing they are almost twice as likely to be in low-paid jobs as other workers (39 per cent of working single parents compared with 21 per cent of working people nationally [2]).


Single parents are also facing marked job insecurity and unpredictable incomes: one in five (19 per cent) working single parent respondents had seen their income fall and one in four (26 per cent) non-working single parents left their last paid job after redundancy, having their wage or hours cut or their temporary contract ending [3].


The findings are backed up by troubling poverty figures published earlier this month, which showed child poverty in families where single parents work full-time has risen from 17 per cent to 22 per cent from 2011-12 to 2012-13 [4].  Single parents taking part in Gingerbread’s research reported taking on extra hours at work, working multiple jobs and having to take a gamble on temporary or zero-hours contracts as they attempt to mitigate wage cuts and the rising costs of family essentials.

  • One in six (16 per cent) of working single parents surveyed were juggling more than one job 
  • A quarter (26 per cent) of working single parents surveyed had increased their working hours in the last two years due to    financial necessity.


Even with these increases, 23 per cent of working single parents would still like to work more hours.  Twelve per cent of working single parents said they had experienced a temporary or fixed term contract for the first time in the past two years; 6 per cent said they had experienced a ‘zero-hours’ contract for the first time in the same period [5].


Single parent of one Alison Fulcher, 43, from Essex works two jobs to provide for herself and her daughter:   “I work 33 hours a week doing two jobs: a housekeeper and a cleaner. For one of my jobs, while I really like the company I work for, I’m earning just above the minimum wage. Trying to bridge the gap between my earnings and the rent and our increased council tax bill is difficult. I absolutely want to contribute and pay my taxes, but on a low income, it’s not easy.


“Last summer I had to sell my car, I just couldn’t manage the running costs. I really miss it and being without it means I have to use the local supermarkets, which are more expensive. I’ve worked really hard to keep up with rising costs, but it’s a struggle.”


Gingerbread chief executive Fiona Weir said: “Single parents are working incredibly hard to provide for their families, but all too often they are barely keeping up with the costs of the essentials for their families. There is little sign of an economic recovery for parents who have had to go without another meal and face the nagging, gnawing worry of bills marked ‘final warning’.


“Our report shows that for single parent families, work isn’t a golden ticket out of poverty, low-paid jobs aren’t a rite of passage and a recovering job market is still leaving many behind.”


Single parents trying to find work reported overwhelming pressure from the job centre in a job market where they felt disadvantaged, with few part-time or flexible jobs on offer for parents needing to juggle childcare with work. More than half (56 per cent) of non-working single parents said that inflexible working hours stopped them from applying jobs all or most of the time [6].


Gingerbread chief executive Fiona Weir added: “Single parents are the sole earners for their family, so it’s absolutely vital that, when they go out to work, their job pays a decent wage and offers them stability.


“Without action from government and employers on in-work financial support, low-pay and job security, too many single parent families will remain trapped in poverty and left out of the recovery.”


The report from Gingerbread is the second in its three-year research project on the impact of austerity on single parent families. A summary of the report is available here.  Both reports are available at


Read the blog by Gingerbread’s Research Officer, Sumi Rabindrakumar

Cross-party think tank Demos has launched a new report making an important contribution to the debate about different types of personal debt.  The Borrowers, supported by Barrow Cadbury Trust, reveals £5bn of hidden debt and calls for a ‘Harm Index’ – which would include payday loans, council tax and rent arrears, and overdue utility bills – to measure the impact, as well as recommending the FCA introduces a food packaging-style traffic light system on all credit products and adverts to improve borrowers’ awareness of risks.


A change to the levy system is also one of a number of proposals put forward as part of a ground-breaking analysis of Britain’s household debt crisis. It comes just days before the FCA takes over as regulator for the consumer credit industry on 1 April – overseeing credit cards, payday loans and debt collection firms.  Under current FCA regulations mortgage providers pay the highest levy, used to fund financial education and debt advice for struggling borrowers, due to their lending the most amount of money.


However, a new ‘Harm Index’ developed by Demos to reveal the true impact of various debts – combining financial, emotional and social consequences – finds that mortgages are relatively stress-free when compared with other more harmful forms of borrowing.  Demos asked people to rank each of their debts based on their negative impact such as legal consequences, mental wellbeing and affordability. Mortgage debts were given a Harm Rating of just 23 out of 100. By comparison the types of debt that people felt had the greatest negative impact included Payday Loans (68), Council Tax Arrears (62), Utility Bills (57) and Doorstep Lending (50).


Demos polling of 1,775 adults also revealed:


  • 88% of adults were in some form of debt, but the majority have never accessed any support to help with their money worries.
  • The most common reasons for borrowing money were a one-off purchase (36%) and to cover an unexpected expense (34%). Almost a quarter of people (23%) had used debt to afford everyday essentials.
  • Over three times as many young people than pensioners are bearing the brunt of increasing debt. 55% of 18-24 year olds, and 48% of 25-34 year olds, said that their debt had increased over the past five years, compared to only 13% of over-65s.


Britain’s £5bn of hidden debt

The Demos analysis reveals that total arrears, combining unpaid rent and council tax, and overdue utility bills such as gas and electricity, comes to £4.7bn – almost £200 per household. However, official debt figures for the UK currently ignore arrears, which Demos’s Harm Index classes as a high-impact debt, instead choosing to calculate only consumer credit such as credit cards and bank loans.


Figures show that 9% of people face rent arrears while 11% are behind on their utility bills – almost double the number who have turned to payday loans (6%). The findings led Demos to call for the official measure to acknowledge arrears in order to achieve a complete picture of the nation’s debt problem and ensure those struggling with arrears receive targeted advice.


The report also recommends:


  • Giving borrowers a legal right to negotiate directly with their creditors before missing payments or reaching crisis point – something current lending systems often don’t allow.
  • The FCA and OFT should replicate best practice used by utility companies to implement a ‘three strikes’ approach on less flexible forms of debt such as arrears and mortgages.


Jo Salter, a researcher at Demos and author of the report, said:


“It is only fair that lenders whose practices cause the most harm to individuals should either contribute the most to funding debt advice or take steps to minimise their negative impacts.


“There is a £5bn black hole in official debt statistics and our research shows just how arrears on rent, council tax and utility bills often have just as big a negative impact on people as payday lending.


“Deciding which forms of debt are ‘bad’ and need stronger regulation should not be based on industry definitions. It should be judged by looking at what types of debt cause people the most stress, disrupt their relationships with those around them, and undermine their capacity to help themselves – because this is the reality of debt problems.” You can read a blog by Jo Salter about The Borrowers report here.


Sara Llewellin, Chief Executive at Barrow Cadbury Trust, said:


“The Barrow Cadbury Trust welcomes this timely report on debt from Demos, particularly the focus on the individual and the recommendation that debt statistics should include unpaid rent, council tax arrears and overdue utility bills.


“Also of concern to the Trust is the impact of debt on an individual’s emotional resilience and quality of life as well as the communities in which they live.”


Launched today, Gingerbread’s latest report finds that most single parent families are financially fragile, and despite frugality, such families regularly struggle to meet their financial commitments.

Paying the Price is the first report in a three-year project investigating the effect of the ‘age of austerity’ in single parent families. With data collected from an online survey and in-depth interviews, the current report turns its attention to how single parents’ household budgets have been affected by austerity measures.

More than half of (55%) of single parents stated that they ran out of money before the end of almost every month. Almost nine in ten (87%) had borrowed money for sought emergency welfare support in the last year. Gingerbread also found that 40 per cent of single parents are behind on their bills.

Between 2010/2011 and 2011/2012, the incomes of single parent families have fallen by  six per cent whilst the incomes of couple families have, for the most part, remained static.

A significant source of financial trouble for single parent families was the rise in living costs; single parents are more affected by the costs of housing, utility bills and foods as they take up a larger portion of their income. Additionally, single parent families are significantly affected by tax and benefit reforms.

This can also hinder single parent families’ financial resilience with three quarters of single parent saying they were rarely able to save, leaving them unprepared to cope with unexpected financial costs.

Although many single parents have adopted a number of ways of coping with austerity, such as careful budget management and finding cheap substitutes for some products, many single parents are trapped in a difficult-to-escape cycle of financial fragility.

Read the full report here.

The Fairbanking Foundation’s latest report looks at how well British banks serve their customers, and argues that the people leading Britain’s banks have the potential to change their industry for the better.


A Better Kind of Banking, supported by the Barrow Cadbury Trust, proposes that the main banks’ business model based on ‘free banking’, alongside a banking culture that has encouraged managers to pursue profits at the expense of their customers’ needs, is greatly flawed. The report highlights alternatives to this approach that illustrate how banks can work with customers to enable them to manage their money more carefully and intelligently.


Authors Charles Leadbeater and Antony Elliott look at four banking innovators that could transform the banking industry if they were taken into the mainstream. thinkmoney has a customer base of 100,000 who pay a monthly fee for a service which guarantees that they will not go overdrawn, ensuring that they do not pay charges for unauthorised overdrafts. Secure Trust Bank help customers set up a current account which is used to pay direct debits and standing orders for regular bills, but no debit card is provided. Customers are instead given a prepaid Mastercard which they can upload their spending money onto. Saffron Building Society encourages people on modest incomes to save by allowing them to track progress toward a goal and get regular encouragement to do so. And the Capital One Progress Card rewards people with lower interest rates on their debt as they pay more money off.


The report points out that these innovations come out of the margins as opposed to the mainstream. It argues that banks need to alter their business models and adopt higher standards to create a better banking system.


Read the full report here.

A new report by the Centre for Social Justice, supported by the Barrow Cadbury Trust, finds that personal debt in the UK is on the rise, and households are increasingly turning to short-term high-cost credit.


The report, Maxed Out: Serious Personal Debt in Britain, finds that personal debt in the UK is close to its all-time high, currently standing at £1.4 trillion. Average household debt is £54,000, almost twice the level it was decade ago.


In the poorest ten per cent of the country, indebted households have average debts that make up more than four times their annual income, whilst average repayment amount to nearly half their gross monthly income. The rising cost of domestic energy and other household bills has led to fears that more households will be pushed into personal debt.


Alongside increasing household debt, the report finds increasing use of short-term high-cost credit such as payday loans, pawnbrokers, rent-to-buy and doorstop lenders. The market for such sources of credit is now worth £4.8 billion a year. Payday loans have received a particularly marked increase in business, increasing from £900 million in 2008/09 to over £2 billion in 2011/12.


Maxed Out highlights vulnerable groups who are disproportionately affected by large amounts  surge of personal debt, such as the elderly, ex-offenders, single parents, the unemployed, people dependant on benefits, households with the lowest incomes and young people classed as Not in Education, Employment or Training (NEET). People in these groups often find themselves in cycles of debt due to low financial resilience and a lack of savings.


Read the full report here.

Martin Holcombe, Chief Executive of Birmingham Settlement, gives his personal take on welfare reform, housing, and the perfect storm currently facing many of the Settlement’s clients.


Welfare reform, the ‘bedroom tax’, tougher sanctions for those receiving Jobseeker’s Allowance, reductions in council tax benefits, reductions in benefits; all happening at once with reduced funding to administer and/or advise those affected – for many the nightmare has just begun; and we haven’t even hit universal credit yet.


What seems to have been overlooked is that many people on benefits already live hand-to-mouth and change at this level is enough to upset the balance and literally send families and individuals lives into chaos; so a whole raft of changes introduced at once with more to come has been nothing short of catastrophic for many.


I’m not saying things shouldn’t change but change on this scale needs to be properly thought through and resourced; implemented at a realistic pace and most importantly, it must be fair.


The number of new food banks opening up and the caps being placed on the number of food parcels people can have shows the reality of the situation – I was on the High Street at the weekend and without moving could see four shops advertising loans or offering cash for goods – to me it’s the payday loan companies benefitting most from these changes and not the taxpayer.


Some statistics from Birmingham Settlement to demonstrate the point: last year for our biggest single advice contract we had 1200 contacts; in April and May alone this year we’ve seen 660 – that’s more than 50% of last years’ total in just two months. At the same time our funding has reduced and we have had to cut our delivery team from 12 to 8.


There has also been a significant increase in the number of people being referred from other agencies who are also struggling to cope – in the last six weeks two advice agencies near us have closed due to lack of funding.


Money advisers at Birmingham Settlement. Their time and resources are increasingly stretched.

Money advisers at Birmingham Settlement. Their time and resources are increasingly stretched.

We are advising people that they may have to wait up to three hours, sometimes more, and the fact that most people are prepared to wait says it all; some days we have to simply close the doors because we cannot see any more people.


There is also a real danger to staff struggling to maintain the service. I was in the corridor outside our offices with an adviser last week and he was stopped by an existing client seeking advice, once outside the building he was stopped again by another client – the pressure being placed on small responsive agencies (and their staff) like the Settlement is immense, and is not sustainable.


It’s interesting that Birmingham City Council recently said they had seen a 91% increase in rent arrears since the inception of welfare reform; and a couple of Housing Associations in the North East reported a 300% increase in arrears – and they have empty properties because people aren’t prepared to move into family accommodation – clearly there is a problem.


At Birmingham Settlement we see hundreds of people and it seems to me we’re penalising those who are least able to deal with the situation – it’s out of their hands.


I propose that a much fairer solution would be to send the bill to the housing provider or local authority. If this was the case, pressure would be taken off the people who literally cannot pay; whilst you could be assured the provider would work quicker to find an alternative solution or accommodation – and perhaps even plan for future needs? Obviously, there could be problems as the tenant could, in theory, be offered something totally unsuitable (think of an elderly or disabled lady with mobility needs on the top floor of a tower block), so there would need to be some safeguards. However, at least the problem would be addressed by those who have a voice or ability to influence – and it’s good to see some providers are beginning to stand up and use their position. The reality is that unfortunately our clients don’t have a voice. Who is fighting for them?


Government has said there is flexibility in the system, but the reality doesn’t seem to reflect this – and welfare changes are being applied across the board with little apparent discretion. Even if there was discretion – what allowances would be made and how would they be implemented? That’s another reason why we need to shift responsibility to the provider.


We often talk about inequality and the need to close the gap between the haves and have nots. Indeed, an independent inquiry by MPs recently concluded that the poorest and most deprived parts of the country are the worst affected by public spending cuts. Here in Birmingham we can certainly agree on that.