No bank accounts and mounting debts: financial difficulties faced by social housing tenants
Of Fifth Social Debt, Almost Half Face Tenants One Problem And Borrowing Housing Are
Social housing residents cope week to week through careful budgeting and limiting consumption, but many do not have sufficient income to live comfortably, a new report has found.
Housing body Clúid and the Housing Finance Agency commissioned the report, carried out by researchers at University College Cork (UCC), on the financial inclusion of social housing tenants.
The report, which will be launched by Finance Minister Paschal Donohoe on Wednesday, shows more than one-third (37%) of residents show signs of weak financial inclusion or are, in fact, excluded from services such as bank accounts, credit unions or insurance.
One in eight residents said they did not have a bank, credit union or post office account, while levels of insurance cover were extremely low, with 90% living without home contents insurance and 84% without life assurance.
Women are more likely to be excluded than men, the research found.
About half of all residents are currently borrowing and have access to a range of different credit sources, with credit unions being the most common source of credit, followed by high-cost credit moneylenders and catalogues, family and friends, and banks.
Emergency borrowing was less evident, although problem debt was an issue for at least 20% of residents.
Despite this, 80% of respondents said they engage in some form of saving.
The research highlighted that financial capability – measured by the ability to consistently make ends meet, to keep track of finances and to plan ahead – showed considerable room for improvement.
Only 9% of residents were deemed to have good financial capability, 64% had some financial capability and 27% had poor financial capability.
The report made several recommendations including increasing the income base and reducing the cost base for these residents, promoting financial inclusion with appropriately designed financial services, building financial capability and introducing a supportive social context.
Kath Cottier, Clúid Housing’s director of housing services, said the research highlighted the “very real challenges” social housing residents face when managing their financial wellbeing.
“It highlights how hard it is for people on low incomes to access financial products that are truly suited to their needs and that will provide a buffer in times of crisis,” she said.
“However, as the findings of the research outline, to really achieve financial inclusion, we also need a broader policy response."