By Venetia Knight and Stephanie Hevingham at Groundwork Greater Manchester
Groundwork Greater Manchester has been working to support vulnerable groups into employment for over 20 years, and over time observed that a lack of financial management skills was impacting the ability of young people in care to sustain employment and housing tenancies. During 2019 we began a pilot project called Care to Work; providing financial capability training for care leavers aged 18-30 who are residents in Stockport & Tameside, thanks to funding from the Natwest Skills & Opportunities Fund.
APPG on Financial Education for Young People
In July 2019 the All Party Parliamentary Group (APPG) on Financial Education for Young People produced a report focusing on the Importance of Financial Education for Children in Care which echoed our observations.
In line with the APPG report, the Care to Work programme found that sufficient, practical financial education was really lacking for care leavers. Many young people leaving care, experience a sudden transition of not managing any bills to suddenly managing them all, as well as having to manage day to day with all their other living expenses and the realities of adult life.
We found that:
- The transition to adulthood for many care leavers has left them with many competing priorities, but unfortunately for them, keeping on top of their finances has not been their number one.
- We have worked with a number of care leavers who are deeply in debt and because of this, their mental health is being affected.
- We have also found that young people paying energy bills in their own flat are simply not aware that they can shop around to get the best tariffs, and in many cases have been paying through the nose for their gas and electricity.
Our employment advisors had to fill the gap resulting from not having a family setting, by teaching them how to budget, pay bills on time, tackle debts and learn about fraud.
For quite a few of them though, we are a little too late. Through their increased vulnerability, a large number of care leavers have been targeted by criminals to be used as money mules, thus resulting in their accounts being closed. As a result there is no option other than to use high cost pre-payment cards for the next 6 years.
A brighter future
For many young people that we have been working with the outcomes have been positive. We offer as many sessions as needed to help them get on top of their finances and better understand how to plan for the future. This includes things like:
- Setting up a bank account
- Going through a budgeting plan
- Setting up affordable payments to pay back debts.
Many of our young people have reported that they are now more confident at managing money, with a large number now making budgeting plans and shopping around to make the most out of their money.
In agreement with the APPG report, we believe that key transition moments should be a high priority. We are working together with the Stockport Leaving Care team to offer our support to care leavers that move into their own property, to get on top of how to budget at the earliest stage, as managing money is a key skill for adult life.
We would like to see more resource being made available, including through initiatives such as the Natwest Skills & Opportunities Fund, to provide practical financial capability skills training for care leavers, both before and after they leave care, to ensure they are as well prepared for financial independence as they can be.