Access to the right advice matters

Turn2us is our national charity partner. They provide practical support to people who are struggling financially – helping them to access welfare benefits, charitable grants and other sources of financial help.

Together, we aim to help build a society where everyone has the tools, support and resilience they need to recover from a life shock.

The advice gap

Around 39 million adults in the UK fall into the advice gap – and while our industry will often articulate this problem as a single issue that affects those who want advice but can’t afford it, the reality is far more nuanced than that.

Our research shows there are in fact four smaller advice gaps, which affect groups of customers who share common needs and challenges. We want to start a conversation with our industry around how we can help everyone access the right level of free or paid for money advice.

We spoke to Anna Stevenson, Welfare Benefit Specialist at Turn2us, to understand more about how they offer financial guidance and support to some of the poorest people in society:

Royal London: Can you give us some examples of the life-changing events people are facing when they first come into contact with your service?

Anna: There are so many different life-changing events that happen to people that can put pressure on their finances, and not all are inherently bad. For example, the birth of a new baby is usually something to celebrate. But it costs tens of thousands of pounds to raise a child.

However, many life-changing events that lead to financial hardship are in themselves hard enough, such as the loss of a job, the diagnosis of an illness or the death of a partner. These times are incredibly difficult not just financially but also emotionally.

Royal London: What impact can these events have on the financial and emotional wellbeing of those affected?

Anna: When a ‘life-event’ hits, it will usually cause an immediate temporary yet substantial interruption to your finances, and without the right support and information, this risks turning into a permanent fall in income.

For those of us without huge savings, the loss in income often leads to a decrease in living standards. You may find yourself struggling with the cost of bills, food and housing payments. This increases your risk of debt, hunger and homelessness.

The emotional consequences can be really damaging for your mental health and your family life, which is why it is so vital to seek the right help.

Royal London: How do you help these people find a positive outcome?

Anna: At Turn2us, we provide practical and quick financial support to stop the one-off life event from spiralling into a crisis. So we give cash grants, averaging £1,000. People can use the money as they see fit and hopefully it will give them some breathing space while they overcome the cause of the financial issue.

We also help people access other cash they may be entitled to or eligible for. Our Benefits Calculator, for example, tells people which welfare benefits they are entitled to and helps them claim. For someone who goes on to claim, they see an average uplift of over £5,000.

We also have a Grants Search tool to help people claim grants from other charities, in addition to extra support available on our website and through our helpline.

Royal London: The pandemic has had a profound effect on the UK economy and has caused any people to experience significant disruption to their employment and personal finances. What affect has this had on both the level and type of demand for your support?

Anna: Prior to the pandemic, some 4-6 million people were experiencing a life-changing event which is likely to cause an income shock every year. Yet, in the last 12 months, over 11 million jobs have been furloughed. So, the pandemic has had a huge impact on financial vulnerability.

We have seen demand for our support peak to extremes, which is why we launched a new grant fund, extended our helpline hours and put in other measures to make support more easily accessible. But what has been really concerning is who has been reaching out for help. We have seen so many young people, so many self-employed people and so many people from BAME backgrounds slipping through the government’s support net.

Royal London: As the effects of the pandemic are likely to be felt for many years to come, what type of support do you believe needs to be in place to stop people from slipping into poverty or even greater financial hardship?

Anna: Life-changing events do not need to evolve into long term crisis and poverty. However, after years of austerity, cuts and freezes, the safety net that is supposed to stop a crisis turning into destitution has been eroded. An event such as the death of a partner should not lead to a young family becoming homeless, but unfortunately this is all too common.

In addition to a better social security system, we need more holistic support such as help with affordable housing, well-paid meaningful jobs, and community centres. All this and more will help prevent life shocks from turning into poverty, but it needs investment.

Royal London: Our research shows that there are a number of barriers which stop customers from seeking the support they might need when managing their finances. Are there any common barriers which stop people from accessing the support you provide?

Anna: We often hear about benefits shame, or poverty stigma, as a barrier for people. Television programmes such as ‘Benefits Street’ often play on untrue stereotypes, which leads to people not claiming their entitlements due to fear of being presented in the same way. It is a similar issue with certain newspapers constantly talking about benefits fraud, despite nine out of ten reports of benefit fraud being totally baseless. There are also elements of institutional stigma; many people feel the DWP has created a hostile environment for people struggling with money.

Royal London: How are you working to overcome these barriers?

Anna: Much like mental health awareness campaigns, we need to reframe the way we talk about money issues. At Turn2us, we help people struggling with money no matter what and we will always be compassionate and understanding. But there are small and practical things we can do to change the discourse. For example, we can call welfare benefits ‘social security’ instead. And we can start talking about social security like we talk about our NHS; a public service for people when they need it.

The main thing we do to overcome these barriers is to co-produce our work. That means working with people who have lived experience of poverty to develop our programmes so that they are designed in a way that makes sure we are getting the right support to people and delivering it in the right way.

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.