How training in financial literacy is helping people to manage their finances in tough times
From websites that tell you how to get the best deals on travel insurance and save on energy bills, to TV programmes that show how to cut the costs of food shopping, we are being bombarded with advice on how to manage our money. Yet recent surveys, conducted by the OECD, YouGov and the think tank Demos, reveal an alarming lack of understanding about basic finance and an urgent need to help people get a better understanding of basics, such as how to borrow money, how to save and the different types of bank account.
Recent changes in the benefits system and the roll out of Universal Credit have highlighted the need for people to have a sound grasp of personal finance. To address this, the National Skills Academy for Financial Services (NSAFS) has been working with OCN London to develop programmes to for people in financial literacy. The aim is to train front-line workers and volunteers to provide support for vulnerable people who are struggling to keep solvent. through group sessions and one-to-one mentoring,
Over the past five years, with thanks to support of Lloyds Banking Group, NSAFS has equipped over 4,000 front-line workers to help people in their communities to manage their money more effectively. This year (in 2017) it has focused on training housing association staff to support tenants who are struggling to stay afloat financially.
Lisa (not her real name), a Cambridgeshire housewife with two children, is one the beneficiaries. Having been out of work with health difficulties and recently losing a substantial amount of income after her benefits were stopped, she found herself unable to cope financially. A mentor from a local housing association – Olena Batista - who has completed the Money Mentors course (accredited by OCN London) , helped Sarah to find cheaper utility suppliers, reduce the number of goods that she has on loan, complete on-line forms and appeal against the benefit cuts. She also helped her deal with stress and anxiety.
The newest programme, launched this year, aims to improve the financial capability of young adults. As part of the NSAFS’s Life, Money, Action! initiative, it is training youth practitioners to help 16 to 24 year-olds to cope financially with key transition points in their lives. This could be moving away from home and paying rent for the first time, taking out a student loan, claiming benefits, embarking on an apprenticeship or starting their first job.
The first courses took place during September and October in a variety of city locations across the UK, including London, Southampton, Birmingham, Manchester, Newcastle, Edinburgh and Cardiff. Topics covered include providing support with budgeting, considerations when choosing financial products, understanding different payment mechanisms, encouraging saving, dealing with borrowing and coping with debt. Youth practitioners also explore the boundaries of their role when providing financial guidance to know when it is appropriate to direct young people to specialist advice services. To supplement the course a range of digital resources have been developed which practitioners can signpost young people to or use in their support session, these are available on the Life, Money, Action! website
Successful participants can now gain a nationally approved qualification - the
OCN London Level 3 Award in Providing Financial Capability Support – which was launched in November 2017. In order to study for the Award, participants must attend two days of training (delivered one week apart), then complete and pass a written assignment.
There is a clear need for training and mentoring to help people manage their finances. A recent OECD report (in 2016) ranked the UK at 15th out of 30 countries at teaching financial literacy, below Estonia and Latvia, with France scoring the highest. Education needs to start earlier, ideally in schools – something that is already happening. But there are many adults who have slipped through the net and are struggling to cope.
Whilst advice is available it is often hard to find and the risk is that vulnerable people will fall prey to loan sharks or find themselves homeless. This is a situation that the NSAFS and OCN London are addressing through this new programme.
Find out more about the OCNLR Level 3 Award in Providing Financial Capability – our qualification of the month (November 2017).