Scott Kennerley

Money Advice Project Manager Citizens Advice

Debt in Northern Ireland

• 391 people every day of the year will be declared insolvent or bankrupt.

• 107 properties were repossessed every day during the period Jan – March 2010

• Unemployment increased by 526 people every day during 12 months to end April 2010.

• 158 mortgage possession orders will be made today

• £131,510,000 is the interest the Government has to pay each day on the UKs net debt of £903bn. This is estimated to rise to £182m a day in 2015-16.

• 21.9m plastic card purchase transactions will be made today with a total value of £1.115bn. 8.2m cash withdrawals will be made today with a total value of £555m

Debt in the UKFigures taken from the Credit Action Website July 2010

• Dealing with Debt service funded by DETI since 2006

• Helped close to 9,000 people

• Dealt with over £80 million of debt

• 2591 clients helped in 2009/10

• Dealt with over £33 million of debt in 2009/10

Statistics from the Dealing with Debt Service

Most common type of debt?

• Credit Card £ 9,755,306.90 299929.34% 39.05%

• Personal Loan £ 5,710,779.59 95717.18% 12.46%

• Catalogue £ 387,605.31 4651.17% 6.06%

• Overdraft £ 708,451.52 4302.13% 5.60%

• Store Card £ 397,430.48 4241.20% 5.52%

Statistics from the Dealing with Debt Service

The Importance of Financial Capability

What is Financial Capability/Literacy?

wikipedia definition: wikipedia definition: Financial literacy is the ability to Financial literacy is the ability to understand finance. More specifically, it refers to an individual's understand finance. More specifically, it refers to an individual's ability to make informed judgments and effective decisions ability to make informed judgments and effective decisions through consciousness of the financial dimension of economic through consciousness of the financial dimension of economic undertaking.undertaking.

Understand financial termsUnderstand financial terms

Confident in making financial decisionConfident in making financial decision

Able to make responsible choicesAble to make responsible choices

Able to plan aheadAble to plan ahead

2591 new debt clients in 2009/10 – an increase of 33% in 4 years

Main reason for being in debt?

Unforeseen change in circumstances – However, in many cases the situation has been made worse by poor financial decision making.

Why?

Lack of knowledge or mis-sold a product

Cultural Change in our attitudes towards credit

Ulster Folk Museum in Cultra

The Importance of Financial Capability

FSA Baseline Survey (conducted 2005 & published 2006)

Less likely to be financially capable if:

•Younger•Not a home owner•No current account•Unemployed/permanently sick or disabled•No or low level qualifications•Being single especially lone parent•Low income•Living in 'hard pressed' (Acorn Classification) neighbourhood•Not born in UK

Respondents from Northern Ireland to FSA Base Line Survey

• NI consumers were less able to plan ahead in particular lone parents score was 18 points below the NI average which was already much lower than the rest of the UK

• NI also lagged behind on areas of the ability to stay informed and choosing financial products

Attitudes of Young People to Money

62% of Young People said if they got into money trouble / debt they would not be able to name any advice / support services they could turn to for advice (Barclays 2005)

77% of Young People are in debt by age 21, the figure rises to 85% amongst homeless young people (Rainer 2007)

Two thirds of Young People do not believe they have a good knowledge of finance and a third think debt is not a bad thing (Nationwide 2007)

Young People and Money Project

The Consumer Financial Education Body (CFEB) has developed a national strategy for building financial capability across the UK and are funding the Young People and Money Programme as a UK wide preventive programme to tackle money issues with young people. Citizens Advice has been delivering the Young People and Money (YP&M) Programme in Northern Ireland on behalf of the (CFEB) for over two years.

The programme has been delivered by Citizens Advice to over 1,000 youth practitioners across Northern Ireland.

Young People and Money Project

What is Young People and Money?

• A free training programme developed specifically for those working with young people that are either not in education, employment or training (NEET) or at risk of being 'NEET'.

•The programme aims to equip practitioners with skills and resources to enable them to better support the young people they work with in becoming financially capable

•It covers practical areas such as credit, debt and day to day money management

Young People and Money Project

Four Main Areas of the course

•Understanding the psychology of young people and money

•Helping young people to make the most of their money

•Enabling young people to make informed choices about saving and borrowing

•Helping young people to manage debt

Young People and Money Project

Types of Exercises

6 Steps to Budgeting

Step 1- Estimate your spendingStep 2- Where does your money go?Step 3- What is your income?Step 4- Essential/ non essentialStep 5- Simplifying budgetingStep 6- Spending Targets

Impact of Young People and Money Programme

Evaluation of the impact of the course shows that young people are :

•Saving more•In less debt•Less stressed•Feel more in control

Sean McCallionL’Derry Citizens Advice Bureau

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