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The financial crisis brewing among social housing residents

Fionn Travers-Smith ProfileThis week Money Saving Movement launched the first part of our research into the cost of living for social housing residents – and our findings suggest that a financial crisis is brewing in the social housing sector, as residents are increasingly struggling to keep their heads above water.

After surveying over 1,200 social housing residents from ten housing associations across the UK, Money Saving Movement has found that:

  1. The vast majority of residents have experienced some form of hardship: 94% have had financial difficulties in the last six months
  2. Even the basics are a struggle for many: More than 2 in 5 struggle to keep up with household essentials
  3. Friends and family are where people turn first for help: Of those who knew where they would turn, 48% said family & friends
  4. Housing associations are not seen as a primary source of support: Twice as many people would go to their bank for help (10%) than their housing association (5%)

Our research adds further weight to a growing body of evidence that suggests that low-income households are bearing the brunt of the financial crisis, as well as the resultant recession.

With the cost of living having risen 25% since 2008, low income households are now also facing an average extra yearly cost of £1,280, thanks to the ‘poverty premium’. For the 13 million people living below the poverty line in the UK, these added expenses can mean the difference between living on the breadline, or being pushed over the edge into damaging spirals of debt.

For those living in lower income households, the reality is that life today is the hardest it has been in a generation. While jobs offering decent pay or decent hours are scarce, families and individuals are struggling to afford even the basics to get by.

With limited financial provision provided to those in poverty and support services often not getting through to the right people at the right time, families and individuals are constantly forced to make dire decisions between getting ripped off or living in deprivation.

With 3.7 million English households living in social housing and almost half of those earning a low income, financial difficulties for low-income households could prove a serious problem for social housing providers.

Many housing associations are working to mitigate these issues, and do provide a variety of support services to their residents. But with further social security cuts looming that will cost those in poverty an average extra £2,744 a year, more and more people are struggling to make ends meet.

There is a financial crisis brewing amongst social housing residents in the UK, and the sad fact is that with the government’s planned cuts to social security, things are only likely to get worse before they get better.

Payday loans are being used for rent, unpaid bills are stacking up behind the sofa, and ringing phones are being left unanswered in case it’s debt collectors on the other end.

Forward thinking social housing providers are working extremely hard to support their residents through these tough times, and our figures show the urgent need for those services. What’s clear, though, is that these vital services must be expanded, with more innovation and cross-sector collaboration encouraged in supporting social housing residents’ financial health & general wellbeing.

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