Bad Weather, Good Habits:encouraging social housing tenants to save

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Presented by Lemos&Crane and supported by Friends Provident Foundation

Methodology • Lemos&Crane worked with 6 social landlords:

The Wrekin Housing TrustCHS

Hyde groupHastoe Housing Association

Circle Housing GroupAster Group

• In-depth interviews with 220 social housing tenants.

Background and Policy Context

• Why savings?• Why social landlords?

- Business case- Financial inclusion and capability- Moral case

• Policy Context- More assertive policy agenda- Welfare reform and Universal Credit- ‘Strivers and Skivers’ - NEST: Defaults, loss aversion and ‘Nudging’

“If tenants had savings and were better placed to deal with emergencies, ultimately we would have less rent arrears.”

Tenants’ Lives• 45% experiencing a challenging situation making them socially or financially vulnerable

•Of these, 66% were living with physical ill health or disability

•80% between 18-65

•37% single person households

•43% had children, and roughly half and half single parent and two parent households

• average income £18,171

Benefit Status and AttitudesTowards Money

No significant correlation between benefit income and attitude towards money

Fully dependent Receiving some Not receiving any

Hobbies and Interests• The majority prioritise low cost, high contentment activities• 2% listed shopping as among their hobbies • 0.5% listed ‘spending money’

Characters, Lifestyles and Perfect Days

“Peaceful, surrounded by loved ones”

“Realizing nirvana”

“Go to a botanic garden – read a book and stroll”

“day at the seaside”

“Gardening”

“I would describe myself as more of an introvert.

“Relax. Me time”

“I’ll help anybody”“Trip to the park with family”

Major Life Events

Tenants’ WorriesDo you have any persistent worries?

Experiences and Attitudes towards Money

• 55% of respondents were ‘careful savers’

• 67% are mostly getting by with at least a small amount left over each month

Borrowing• 61% of borrowers were up to date and coping with repayments

• 62% of respondents said they did not borrow

Future Planning• 62% said they were in work but not planning for retirement

•56 % did not know how they would cope with an unexpected expenditure

Saving Behaviour

• 24% were saving regularly

• 33% held some savings

• The majority of savers held up to

£1,000

• 73% felt they should save more

“[I would like to save] because I would like to have a money ‘cushion’ to rely on when it’s needed.”

“I have nothing to fall back on if a disaster was to happen.”

Are you saving regularly?

Savings Targets

Those not regularly saving were just as likely to have clear ideas of what they wanted to save for as those who were

saving.

“[I would like to save] because I would like to have a money ‘cushion’ to rely on when it’s needed.”

“A holiday would be lovely!”

Why are tenants not saving?The overwhelming majority say they would like to save but

cannot afford to do so (95%)

“We don’t have enough money to be able to save.”

“can’t afford to!”

“I would like to [save] eventually but I don’t have any money now”

Do you think you should save more?

Could tenants save more?

67% are managing their money with at least a small amount left over.

“[Financial impact of having children includes] having to buy treats etc for

kids to take to school for the class so children feel accepted.”

“I am sensible but extravagant with my grandchildren.”

“We struggle but we do go away once a year.”

[Why not saving?] “Income is too low if we are to have a holiday.”

How can landlords help?• 39% said they would welcome their landlord’s help in opening a savings

account

• 47% said they would welcome their landlord’s help in joining a Christmas

club.“More information to tenants on ways to save.”

“Good to have financial advisers - more support and advice especially for people

in debt/rent arrears.”

“Help filling in key forms relating to money and saving.”

Conclusions

• Stereotypes of social housing residents

• Tenants’ experiences of and attitude towards money

• Social norm of lifestyle-related expenditure

• Segmentation and landlord involvement

Tenants’ more radical suggestions

“Maybe if we paid a little bit more on our direct debit rental payments that could be saved on our behalf.”

“I could pay a couple of pounds more when I pay my rent that would be put into a savings account. This would build up over time and I would not miss it. A

small amount would be money that I would not miss!”

“I pay a little bit more on my rent account and this puts me in credit. Even a little bit would be useful.”

Rent Plus• Tenants open a savings account, perhaps a cash ISA, with a supplier identified by the landlord

• Tenants make a budget of reasonable expenditure and identify any surplus cash regularly

available for saving, whether large or small

• Tenants ‘opt in’ preferably at sign up (though it would be open to all tenants) to overpaying

their rent by a set monthly amount

• The money they overpay remains the tenant’s and cannot be used by the landlord to clear

rent arrears

• The excess on the rent charge is periodically and automatically swept into a savings account

• Landlords can then top up the savings accounts with cash, prize draws and other incentives.

• Tenants can also top up the savings account if they have surplus cash over and above the

regular amount saved

• Withdrawals from the account would be through the financial services provider in the normal

way.

Full report available as a PDF from

www.Lemos&Crane.co.uk