Average household debt is at record levels, with more people finding their income doesn’t cover essential spending, fuelled by the cost-of-living crisis. There is help available, as David Chambers of Community Money Advice explains.
In 1992, Heather Keates and her husband Tim experienced the sudden death of their five-month-old son Tom from a rare health condition. The family spiralled into debt and spent the next twelve years paying back over £30,000 with the care and support of their wider family, friends and local church. The Keates came close to losing everything, and Heather started thinking about other people who fall on hard times and have no-one to turn to for advice and help.
Heather’s Christian faith spurred her into action to set up a debt advice clinic in 1997 in West Sussex from which Community Money Advice was born, becoming a registered charity in 2003. Today, CMA’s network of over 160 Debt Advice and Connect Centres across the UK help more than 7,000 clients a year manage debts worth £71 million in total and make their money go further.
Community Money Advice is a major provider of face-to-face debt help and support free at the point of need, available to all who require it and live close to a nearby centre. It’s especially suited to those considered vulnerable, who struggle with their mental health or find the limitations of online or telephone-only services hard to cope with. CMA partners with lots of different organisations, creating a diverse centre network hosted by churches and community groups; embedded within housing associations and district councils; and aligned with foodbanks and social enterprises.
At the heart of CMA’s debt help service are the 1,100 paid and volunteer centre staff who sit down with clients to listen and understand their money troubles. Giving clients the time and space to share their story and the burden of debt is a formative first step on the pathway to a debt-free future.
CMA’s service finds its way into some unexpected places. Malcolm Lee volunteers at The Bridge Money Advice Centre in St Ives, Cambs, but sees clients in the neighbouring prison. HMP Littlehey is a Category C male prison with a population of 1,200. As part of rehabilitation and release planning, offenders can make an appointment with Malcolm to help deal with personal debts.
“Being on remand or serving a custodial sentence stops someone earning a living or receiving most state benefits, drastically cutting their personal income,” explains Malcolm. “Managing regular payments and sorting out arrears whilst inside, with little or no contact to the outside world, means we can stand in the gap. In the period leading up to their release, we discuss the various debt management options and enable a person convicted of a crime to learn basic money skills so as to be better prepared to manage their financial affairs.
“It can be really difficult for an ex-offender to adjust to being back in open society and move on with their life, particularly when they’ve spent a long time in jail. The opportunity to engage with that person in the lead up to release, and provide follow-on support through a local CMA centre, can make all the difference to getting themselves back on their feet and lessen the risk of re-offending.”
CMA centres are natural allies with foodbanks and social supermarkets, because recipients of food parcels and fixed-price baskets of cupboard essentials find it impossible to make ends meet. Claire Birdsall runs The Oaks Money Advice Centre within Blackburn Foodbank, part of the Trussell network. The centre has seen client numbers rise by 12% year on year, but it’s the higher proportion of clients with deficit budgets that’s more of a concern. As Claire explains, “Once a person signs up as a client, we do a deep dive into their household finances to produce a budget statement showing income, spending and personal debts. A household budget plan could often be adjusted to cover a one-off increase in an essential cost. However, the cost-of-living crisis has seen significant increases across the board on rent, energy, council tax, utilities, insurance, and transport – on top of food costs. Whilst the minimum wage and benefits have gone up, average incomes have not kept pace with annual inflation, and the gap between what’s coming in and what’s going out is getting bigger for more people.
“It’s an issue that can’t always be solved at a local level and needs a national plan of action to tackle the inequality and poverty a deficit budget only makes worse. Our goal is to take someone feeling at rock bottom and be that helping hand to overcome their financial hardship and continue doing it on their own without us. If they have no choice but to continue living with a deficit budget after coming to see us, they’ll end up back where they started and the cycle of debt won’t be broken.”
CMA’s Policy & External Affairs Manager Steve Bolton acknowledges Claire’s experience is a growing one. “We know that not all people’s problems can be solved by our local centres, and there are underlying structural and systemic issues that are driving poverty and inequality. An example of this is the fact that so many of our clients struggle to make ends meet. CMA’s 2023 Impact Report shows that 67% of centre network advisers saw deficit budgets ‘very often’, and 24% saw them ‘often’. CMA is a strong voice within the debt advice sector and campaigns for change to alleviate financial hardship and lift people out of poverty. In order to push for change effectively, we also partner with other charities and think tanks. It is vital that we do all we can to address the root causes of debt, and ensure that those experiencing debt are treated with dignity and respect. CMA supports our network of centres and their clients by amplifying their voices to influence wider policy decision-making by regulators and government.”
Research undertaken by Debt Justice in 2022 shows ethnically diverse British people are almost twice as likely to be in serious debt than their white counterparts (7% v 4%). An Office for National Statistics survey in 2023 into the cost-of-living crisis found just over half of Asian or Asian British adults, and 47% of Black, African, Caribbean, or Black British adults were finding it difficult to afford their rent or mortgage payments, compared with 33% among White adults.
CMA has a handful of centres serving Muslim, Hindu and Afro-Caribbean communities but wants to see many more open to enable ethnic minority people plagued by debt get access to the help they need. CMA’s Business Development Manager, David Chambers is keen to find opportunities with suitable organisations interested in setting up a debt help service in their community. “CMA is run with a strong Christian ethos at its heart but partners with organisations of all faiths, or none, in an understanding of mutual trust and respect for one another’s values. What matters is joining forces to widen access to the expert help people need to deal with the misery of being in debt.”
The London Borough of Enfield received the first of two Royal Charters in 1303 from King Edward I, nearly 90 years after the signing of the Magna Carta. According to the 2021 Census, Enfield’s population now stands at 338,000, with just under 30% identifying as belonging to ethnically diverse groups. The harsh realities of day-to-day life for many of the residents belies Enfield’s regal associations. Jubilee Central in Lumina Way is where you’ll find CMA’s Enfield Debt Centre. Opened in 2018, it’s part of a portfolio of support services available to the local community including fuel bank, befriending, school uniform project, addiction recovery, and foodbank. “It shows in stark terms the ripple effects of being in debt,” says John Franks, CMA’s COO.
“Falling into debt can be the result of mental health conditions, and being in debt can bring on mental health conditions. Lifestyle choices, the sudden loss of a loved one and unexpected changes in circumstances such as serious illness and unemployment are some of the main reasons behind the epidemic of personal debt sweeping across the UK. The cost-of-living crisis has drained away household savings built up during the pandemic, leaving more people without a safety net and fighting to keep their heads above water. For the most vulnerable and marginalised in society, the situation is often much worse.”
CMA’s Debt Advice and Connect Centres are on the front line in the battle to defeat problem debt, offering free, unconditional and confidential advice. If you are struggling with debt or money worries, then visit communitymoneyadvice.com
CAN YOU HELP?
If you are interested in helping others with money worries by establishing a local money advice service in your community, or in volunteering at a CMA centre local to you, please contact CMA’s business development manager in the first instance, by emailing: david@communitymoneyadvice.com
If you’d like to train to be a Budget Coach, to help family, friends and others in your community manage their household budgets, CMA offers a one-day online course, which will teach you budget management skills, and also when and how to identify a need for the help of a qualified debt adviser and how to make that referral. Contact: training@communitymoneyadvice.com
All Photo Credits: Courtesy of CMA
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