Tameside Strategic Partnership

Many Partners, One Direction

Skip to main content
 
 
 
 
InstantAtlas Server Logo

InstantAtlas™ Server 6

 
 
 
 
  Log In

Child Poverty Needs Assessment

5. Financial Support and Income

5.1 Promoting Financial Inclusion

The Resolution Foundation’s most recent report predicted that "2011 will be a particularly anxious year for low to middle income working households – many of whom are already living on the edge – with a powerful "triple crunch" on family budgets":

  • Stagnating pay – With nominal wage growth forecast by the OBR at just 1.9% – less than half the 2001‐2008 average of 4.0 percent – and likely to be even lower for those on low‐to‐middle incomes
  • Rising costs – with RPI currently at 4.5% and CPI at 3.2%, and forecast to remain above 2% throughout the year, as the January VAT rise adds to pressure from rising fuel costs and import prices
  • Losses to many family budgets as different tax and spending changes kick in – while the average low to middle earner household will benefit by around £340 from forthcoming changes to both Income Tax and National Insurance allowances, some households will lose as much as £900 in support for childcare in 2011, as wider plans to reduce spending on tax credits by £6.2 billion in the period to 2014/15 begin to bite

In Tameside 83% of children live in families reliant on tax credits for part of their income.

Recent analysis by the council’s Economic Development Unit of the Annual Survey of Hours and Earnings (ASHE) 2010 is also informative. In April 2010 median Gross Weekly Earnings (GWE) in GB were £405.7, up 1.8% from 2009, for employees. For men, earnings were £499.1, up 1.2%; for women earnings were £316.6 up 2.1%.

However for Tameside residents the equivalent GWE was £366.1, down 0.8% from 2009. Male residents earned £436.10, down 3.1% on 2009; females earned £284.40, an increase of 6.0%. Tameside residents remain 8th in the GM residents earnings ranking, earning 95.5% (2009 97.6%) of the GM average.

Figures based on gross annual income for residents working full-time are also informative. Again earnings in Tameside are much lower than the national average but even more telling is the gap in Tameside between the highest and lowest earners. Over a 2 year period from 2008 to 2010, the wages of the top 20% or earners remained relatively static reducing by only £216 ( a 1% decrease). In contrast the wages of the bottom 20% of earners dropped by £1,125(a 7% decrease):

Line graph showing individual earnings (full time)

Research by the Resolution Foundation in 2009, showed that low-income households – with an average of £15,800 at their disposal – are walking an increasingly precarious financial tightrope. It has found that 24% of low-wage households spend more than a quarter of their monthly income on debt – twice the number from four years ago. The study shows nearly a third of low-income households have high loan-to-value mortgages and are in negative equity, making them vulnerable to homelessness if they lose their job.

Research has also shown how families living in poverty can pay much more for access to finance and other essential goods and services. "The Poverty Premium" by Save the Children and the Family Welfare Association, shows that low income families can pay around:

  • 150% more for basic goods such as an oven bought on credit
  • 10% more on gas bills paid through pre-payment meters rather than by direct debit
  • Other areas where poor families end up paying more is for electricity bills (8% more) and for home and car insurance in deprived areas

In the current economic climate it’s more important than ever for people to be on top of their personal finances. The "link between debt and mental health issues" is well established, and recent research concluded that “people’s financial capability is a strong predictor of their psychological wellbeing;" . The MINT (Money Information Network Tameside) partnership will be promoting the Money Advice Service which will help people make confident, informed financial decisions and make the most of their money. It will encourage people to take action before money worries become unmanageable money problems. The service is completely impartial and will never recommend products or try to sell anything.

The Money Advice Service can help people to:

  • Cope with changing circumstances, like a sudden drop in income
  • Get the most out of a budget
  • Save for a special event, or just a rainy day
  • Borrow wisely
  • Plan for retirement
  • Understand tax and welfare benefits
  • Explain financial jargon

When Money Advice Service doesn’t have the answers, it will help people to find them elsewhere. This will include signposting to, for example, specialist advice on debt or pensions, or to regulated financial advice.

The Money Advice Service service is a response to the Thoresen Review, commissioned by the Treasury in 2007. The Thoresen Review looked at how to bring generic financial advice to everyone in the UK and it recommended setting up a pilot or pathfinder to test how to do this. The project was initially managed by the Financial Services Authority (FSA), and latterly by the Consumer Finance Education Body (CFEB).

Following the success of the pilot the CFEB is offering a completely free, impartial programme of financial education delivered to employees in their workplaces and at a range of community locations.

The programme is designed to be delivered easily and effectively in the workplace or community location and comprises a free hour-long seminar, given by a specially trained presenter, together with a free supporting guide for each attendee.

This national initiative will be supplemented by a series of locality based programmes managed by the MINT partnership. A pilot programme in the Denton South Ward brought together resources from Irwell Valley Housing Association, Childrens Centre, Health Improvement, CAB and Cashbox Credit union. This resulted in a number of residents receiving more detailed debt advice, whilst other agreed to join the local credit union.

Household income and levels of debt in a household also increase the chances of living in fuel poverty. A household is said to be living in fuel poverty when it needs to spend more than 10% of its income on fuel to maintain a satisfactory heating regime. In 2008, it was estimated that around 15,314 or 16.5% of households in Tameside were “fuel poor”. Families need to ensure that within their households they have access to working, efficient heating systems and are able to manage their fuel debt. Access to financial support and advice including heating grants and low energy tariffs is critical in supporting family access to affordable warmth.

5.2 Debt Advice Service

The Council’s Debt Advice Service works predominantly with homeowners who are struggling to make mortgage payments. This includes negotiation with lenders, organising repayment plans and providing representation at County Court hearings. In the majority of cases it has been possible to reschedule existing debts and negotiate with lenders to prevent possession action.

Clients can access the service in a number of ways including via a freephone number, on-line referral, text back and via a drop-in session.

The Debt Advice Service also manages entry into the Mortgage Rescue Scheme, introduced for homeowners in difficulty.

Cases opened 01/01/10 – 31/12/10

In this period the service advised 421 clients. As a result the service opened 260 long-term case files (including 18 clients referred by the probation service) and the remaining 161 clients were given assistance through the fortnightly drop-in session or by telephone.

Total debt of the drop-in session clients: £105,661.

Of the 260 long-term cases;

  • 201 were homeowners with total debts of £3,026,659 of which £1,132,030 is mortgage and secured loan arrears
  • 59 were in rented accommodation with total debts of £638,959 of which £29,937 is rent arrears
  • During this period 378 cases were closed

Welfare Rights Service

The Council’s Welfare Rights Service Provides information and advice in respect of welfare benefits and tax credits, undertakes casework; provide advocacy; offers representation at appeal hearings; and act as consultants to statutory and voluntary sector staff.

Cases opened 01/01/10 – 31/12/10

In this period the service opened 2374 new cases. The families attached to these cases had a total of 1471 children. These cases involved a 16,995 contacts across the range of issued listed below:

Welfare Benefits - contacts 2010

Cases opened by Ward 1/1/2010 - 31/12/2010

St Peters 201
Ashton St Michaels 166
Hyde Newton 147
Ashton Hurst 145
Droylsden West 135
Ashton Waterloo 134
Stalybridge North 133
Dukinfield 125
Other - out of area 124
Mossley 122
Denton South 115
Droylsden East 110
Dukinfield/Stalybridge 105
Audenshaw 98
Hyde Godley 95
Denton North East 92
Hyde Werneth 92
Stalybridge South 84
Denton West 79
Longdendale 72
Total 2374

Benefits issues arising from illness and disability were the major source of enquiries. However, the increase in the number of Tax Credit issues dealt with, noted in recent years, has continued with 647 cases dealt with in the current year.

Casework is the core of the Welfare Rights Service. The generalist caseworkers take on the more complex cases that cannot be resolved by the telephone advice line and fall outside the remit of any of the specific projects. Most cases involve trying to resolve problems with claims that have already been made and challenging the decisions at appeal. Cases can be taken before judges at the First-tier tribunal, and if unsuccessful they can be argued before an Upper Tribunal Judge and it is not unknown for individual cases to take more than one year to resolve. To improve support to carers this year the Welfare Rights Service has started offering appointments each month at Tameside Carers Centre. These are being increased to weekly appointments in 2010/11.

Summary of Key Messages

  • Families are facing increasing strains upon their household budgets through a combination of stagnating pay, rising cost and losses to income through changes in tax and spending changes
  • 83% of children live in families reliant on tax credits for part of their income
  • The wages of the top 20% or earners remained relatively static over the past 2 years, reducing by only £216 ( a 1% decrease). In contrast the wages of the bottom 20% of earners dropped by £1,125 (a 7% decrease)
  • 24% of low-wage households spend more than a quarter of their monthly income on debt
  • Families living in poverty can pay much more for access to finance and other essential goods and services It is estimated that these families pay £1,001.91 more than those with higher incomes
  • People’s financial capability is a strong predictor of their psychological wellbeing
  • The council’s Debt Advice Service works predominantly with homeowners who are struggling to make mortgage payments but also with those in rented accommodation at a ratio of around 3:1.
  • The Council’s Welfare Rights Service deals predominantly with benefit issues arising from illness and disability though increasingly with Tax Credit Issues
 
Accessibility  ·  Site Map  ·  Contact Us  ·  Legal  ·  Feedback  ·  About  · 

******