A two-year study into a pioneering financial education project has found that it helps to slash the number of evictions – the leading cause of homelessness in the UK.
The innovative Money House project, run by financial education charity MyBnk, sees care leavers learn the skills, knowledge and confidence to live independently as they head to flats in Greenwich and Newham to learn about budgeting and finance. The course has been such a hit that it is now mandatory for all young people applying for social housing with four London councils as well as sheltered housing providers like Centrepoint, the YMCA and Depaul.
— MyBnk (@MyBnk) December 21, 2017
The Big Issue featured the project in our evaluation of financial education back in September but now independent evaluators have carried out to assess its impact.
After asking nearly a thousand 16-25 year olds in care or sheltering housing for their thoughts, it was revealed that participants were now three time less likely to slip into rent arrears and there was a 64 per cent drop in evictions for those at risk of losing their home.
The Big Issue magazine is a social enterprise, a business that reinvests its profits in helping others who are homeless, at risk of homelessness, or whose lives are blighted by poverty.
This is a significant impact in an area where one in three care leavers lose their first home, costing £7,056 to evict a tenant. On that metric, The Money House has already found more than £300,000 in direct savings. And as for the Housing Association Charitable Trust’s social value model, for every £1 spent, there is £3.36-worth of social value.
Almost half of the project’s participants have seen a decrease in their bank charges or missed bills while a fifth now borrow from sustainable firms rather than high-cost lenders.
“Working with vulnerable young people at these transitional periods is crucial,” said MyBnk CEO Guy Rigden. “That’s when they are at the highest risk of making the poor financial decisions that can have lifelong consequences. Social and key workers are under immense time and resource pressures to meet the need. These results, show investing in young people and the use of expert-led direct delivery of these specialist areas pays back for everyone.”
The Money House project has been running for six years and recently announced that funding has been received to keep it running until 2021.
It is not the first time financial education has been thrust into the limelight recently – the first-ever financial education textbook was launched earlier this month and will be distributed to schools around the country for free.
Sarah Porretta, UK financial capability director at Money Advice Service, who part-funded the study, said: “There is a real lack of cost benefit analysis in financial education, including with young adults transitioning into independent living but this report provides a fantastic contribution to the growing evidence base. The Money House is an excellent example of providing vulnerable young people, such as those leaving care, with the skills and knowledge they need to manage their money and stay out of problem debt.”