Money-saving expert Martin Lewis, the National Housing Federation (NHF) and Citizens Advice are backing a multi-million pound Big Lottery Fund initiative today aimed at preventing thousands of the most vulnerable people living in social housing across England from falling into a spiral of debt.

Big Lottery Fund (BIG) is today announcing £31.7m in funding for 37 projects that will help an estimated 150,000 tenants across England become more financially aware and more confident in money management as well as better able to access financial products and services such as a basic bank account.

Figures released this month by the Insolvency Service show there has been close to a 10 per cent surge in debt relief orders since the same quarter last year.

Further evidence from the NHF shows an estimated 310,000 people borrow £120m each year from loan sharks on which they repay £450m.

It is estimated that the associated stress, health issues and family breakdown linked to this debt crisis is costing the state £43m annually.

And people without access to basic financial products are facing a poverty premium as they pay more for everyday services – not having a bank account can even act as a barrier to work as some employers require bank accounts for payment of wages or salaries.

The latest Department of Work and Pensions Family Resources Survey published in June shows that 10 per cent of people on the lowest income (less than £100 a week) still do not have access to a bank account that enables direct payments – compared to just three per cent of the general population.

Martin Lewis, creator of MoneySavingExpert.com, said: “Disgracefully it costs more to be poor.The poverty premium means, from household goods to energy bills, things are more expensive for those with little cash as they need to borrow to buy or don’t get the direct debit discounts others take for granted.

Lewis continued: “Sadly we still don’t have compulsory financial education on the curriculum, and even then, more will be needed to help the financially excluded. This is even more important as the universal credit means many on benefits will have to take greater control of their own money management.

“The Big Lottery Fund’s Improving Financial Confidence programme is a good step towards that and should provide help and information to 150,000 people who find themselves without access to products and services like bank accounts or contents insurance.

"Hopefully it will reduce the risk of desperation driving people into relying on costly payday loans or even loan sharks.”

Nat Sloane, Big Lottery Fund England chair said: “We wanted to find a way to prevent debt from starting or getting worse for people and communities on very low income or benefits.

"When you have very little and you don’t have the confidence to work through the maze of modern money management, it can be tough getting the right support when it matters most. The right advice and support in hard times can become the much needed lifeline.

“BIG’s funding will ensure that social housing providers, advice providers and local authorities can work together to improve the financial confidence of communities most in need to lead fulfilling lives. Close to £32 million can make a big difference to those most in need through the great range of projects that will now be developed by the agencies receiving today’s funding.

Sloane continued: “Recent changes in legislation, such as the benefits cap and the introduction of Universal Credit - whereby benefits payments go to the head of the household rather than directly to the landlord, mean there is even more pressure on tenants to take responsibility for managing their finances.

"This means today’s investment could not come at a more imperative time. It will help ease the pressure on individuals as well as freeing up valuable resources within our health and social services.”

BIG worked with a range of stakeholders to establish the need for action in the area of financial exclusion and commissioned an initial scoping study into this area which found that social housing tenants were the worst affected, and in particular tenants who are moving in and out of work, or are in their first 12 months of tenancy, or young people in social housing.

David Orr, chief executive of the National Housing Federation, which represents England’s housing associations, added: “The Improving Financial Confidence programme couldn't have come at a better time. Many people living in housing associations are finding it increasingly difficult to manage their household budget, with the recession and changes to the way housing benefit is paid all adding to the pressure.

“The National Housing Federation has been delighted to work with a range of different stakeholders, the Big Lottery Fund and housing associations to secure and deliver this multi million pound programme. It will make a real, practical difference to many people’s lives.”

Livin Housing has been awarded £841,415 to deliver the MonKey project working with 15 partners.

Expected to reach more than 20,000 young and first time social housing tenants across County Durham, the project will provide information and practical advice on products and services – including how to get hold of cheap furniture and how to set up a bank account.

It is expected that the project will help reduce the number of evictions and terminations in the first year of tenancy by helping people to budget and remain in control of their finances.

And Coventry Citizens Advice Bureau receives £988,756 to work with partners including Groundwork West Midlands, Whitefriars Housing, Midland Heart Housing and Coventry City Council to support first time tenants, those under 35 and those going through significant life change that will affect their income.

The group will create a purpose built replica flat as a training facility where people will be taught how to run a flat cost effectively which will help them sustain their tenancies. Practical advice will be given such as how to save heating costs, how to read energy meters, how to budget and cook cheaply, how to furnish a flat cheaply and DIY tips.

Gillian Guy, chief executive at Citizens Advice, said: "Many social housing tenants are on low incomes and vulnerable to changes in welfare provision. So as a leader in providing community financial education for adults, we're delighted to see the Big Lottery Fund invest so much in helping to improve the financial confidence of such tenants.

"Many Citizens Advice Bureaux - in partnership with housing agencies, local government and other community organisations - are heavily involved in delivering this confidence-building programme on the ground.

"We look forward to continuing to support all partners so that as many disadvantaged people as possible can feel more in control of their finances."

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