Barnado’s has condemned the replacement for Education Maintenance Allowance for causing severe hardship, leaving young people without the financial backup to support their everyday expenses. The charity interviewed 17 key staff and 51 of the disadvantaged young people it works with (and some of their friends) about the new Bursary Fund. It found evidence of young people unable to meet basic needs and skipping meals in order to keep attending college courses.
Anne Marie Carrie, Barnardo’s chief executive, called the finding that students are going hungry in order to learn “an absolute disgrace”. She labelled the Fund an “unfair and totally inadequate replacement” for EMA.
The report, Staying the Course, challenges the view that providing money to 16-19 year olds was merely an incentive:
The assumption that young people used EMA as an optional incentive to continue in learning is misleading. In fact, the poorest young people used it as a necessary means of support and without it they struggle to continue with the education or training they need to find the jobs they aspire to.
The charity concludes that the funding available for the 16-19 Bursary Fund “is insufficient to meet the support needs of those in poverty”. It says the government has a moral duty to invest in adequate help for 16 to 19 year olds from poorer backgrounds to complete their education or training. “The alternative is to risk losing a whole generation to the trap of long-term unemployment because they don’t have any qualifications.”
“You can’t solve money problems with money.” That’s a typically challenging statement from coach and trainer Neil Almond. He is the motive force behind Money Mastery courses, delivered to hundreds of youth professionals over the past few years.
His argument is that an emergency loan or pay rise may seem like an answer to a problem. But they are quick fixes that only relieve pressure. They don’t alter fundamental habits. They don’t alter young people’s behaviours and attitudes, which are what really matter.
Almond was frustrated by financial capability programmes that focused on imparting knowledge or skills – what is APR or how to write a cheque. To help youth workers make a real and lasting difference it was necessary, he felt, to focus much more on psychology and to develop tools and strategies that would change the way young people engage with money. As he puts it:
financial literacy is about mindset far more than availability of cash.
So what does that look like in practice? The National Youth Agency has just published online a very handy booklet in the form of a “legacy document” marking the end of the Money Mastery programme. Anyone who attended one or more of the courses will see it as a refresher. For newcomers it offers a clear and readable introduction to the approach.
Almond is very keen on responsibility. “Real long-term attitudinal and behavioural change only occurs when a young person recognises that their life is shaped by their choices and actions rather than outside influences”. He does a good job of presenting this as effect versus cause, recognising that if young people always think the powerful influences on their lives lie outside their control they severely limit their ability to change.
He also has insightful practical ideas for helping a young person create a compelling goal – “the sort of goal that gives them slight butterflies of excitement and leaves them asking the question ‘could I really do that?’”
Like other forms of coaching that Neil Almond now provides through his network Whatever life throws, Money Mastery is an entrepreneurial, high-energy, firewalking kind of approach. It is driven by Neuro Linguistic Programming (NLP), a medley of popularised psychology which is not to everyone’s taste. But the techniques are clearly useful to many and potentially inspirational and energising. As the booklet’s subtitle says – it’s a refresher.
Young people who have problems with money, housing or jobs need good quality advice. What happens if they do not get it?
No surprise that many become ill. Some end up in debt, homeless or involved in crime. The cost is not just to the young people, says a recent report by Youth Access. There’s also a real cost to the tax payer – with the biggest strain put on the NHS budget.
The report, The outcomes & impact of youth advice – the evidence, brings together research evidence on the difference advice makes to young people’s lives. It also quotes young people’s thoughts about what would have happened if they had not got advice:
“I would have been homeless, mentally disturbed and in the gutter.”
“I would have got worse and committed crimes.”
“I think I would probably have had a breakdown….and still looking for advice.”
“I would probably have been dead, I was sharing needles, involved in prostitution.”
Providing quality advice, including legal or rights-based advice, costs money. But not as much as not providing it. The report’s author, James Kenrick, points out that one estimate of the cost of unresolved problems experienced by 16-24 year olds is £1 billion a year.
The Office of Fair trading has logged my complaint about two websites offering loans to young people that are apparently unregistered and unlicensed. The sites, loans for young people and loans for 18 year olds, do not seem to have a consumer credit licence – a legal requirement in the UK.
The OFT, along with local authority trading standards services, has a duty to enforce the law. It will take into account other complaints it receives about these sites. it won’t, however, disclose details of what action it takes. So the only thing we’ll see is whether the websites are still operating. Meanwhile, young people need to know to avoid any unregistered lender – whether an apparently friendly and helpful loan shark or a tempting website.
Feel free to add your complaint about these sites by emailing the Office of Fair Trading
Search the internet for “loans for young people” and you may come across a site called, plainly enough, loans for young people.
Its tempting offers should ring warning bells. It says it provides secured and unsecured loans to 18-30 year olds with a job. Bad credit history is no barrier. There is a promise of no “time-consuming formalities or credit checks”. Acceptance is 100%, apparently. The site is written in non-idiomatic English. This, for instance, is not very reassuring:
Many people think that there is no expense of the young people and it is only the family man and others who need to spend money in several situations. It is actually totally wrong and just like a married man or a father to children; the young people too have their particular expenses though the reasons may be different.
There is none of the small print that legitimate credit companies are obliged to include on their websites. No company name or registration number, no consumer credit license number, no statement about typical APRs or the perils of not keeping up with repayments. There is just a meaningless and contradictory statement about not being a direct lender or a broker.
So who are they, and why are they allowed to tout for young, probably desperate, customers online? The domain name was registered by a non-UK individual called Rajat Kumar at an address in New Delhi, India.
A similar site offers loans for 18 year olds. Almost identical in approach and content, this domain was registered by Pawan Kumar, also with an address in New Delhi.
Can this be stopped? Do the UK licensing authorities have any powers to close down such sites? There are well-advertised ways to report illegal lenders or loan sharks. But who should this be reported to?
I will try to find out. Meanwhile, it is a good reminder to spread the word among young people that borrowing money from anyone but a registered, licensed lender is almost certain to lead to serious trouble.
Death no longer heads the list of young people’s greatest fear. Under 25s are now far more terrified by debt.
Three years ago Youthnet surveyed young people asking what was their single greatest fear. Around 14 per cent answered death – their own or that of someone close to them. Around the same proportion said their greatest fear was financial insecurity and debt. The researchers were understandably struck by the powerful concern about money. “This could be a reflection of the current financial climate,” they observed.
“Alcohol can get you through a time of no money better than money will get you through a time of no alcohol.”
That’s an old saying, to trigger discussion.
It is irresponsible, possibly dangerous and funny only to a certain sense of humour. Still, it is a provocative way to explore what young people really value. Help them see the connections between what they have, what they want and how to get it.
Clearly the saying as expressed above is going nowhere, except as gallows humour for people with admitted alcohol dependency problems.
So ask what young people would change it to. Replace alcohol with a gap, and ask young people to complete it in a way that is true for them.
“______ can get you through a time of no money better than money will get you through a time of no ______.”
What word or phrase would young people substitute? Friends, perhaps. Or music? Football?
Be light-hearted, while exploring a key aspect of the psychology of money – what is it for and how much does it matter?
Most people ignore most financial literacy because most financial literacy ignores most people. Something like that is clear from this financial knowledge test.
Do it if you want. But don’t fret if you don’t get full marks. Nine out of ten US citizens who did it got at least one wrong. It’s very focused on financial products and long-term financial planning. It’s not where most people in the UK are.
The test is taken from the Financial Literacy Center in the States. It’s a fine and well-organised site with plenty of sound, useful advice and ideas. It also demonstrates how restricted the view of what financial literacy is. Knowing what happens to bond prices when interest rates rise is not part of the knowledge, skills and attitude that would improve the money management of young people in the UK. Or any age group.
One day I’ll devise a test that touches on some real questions about money, to give people confidence about what they know and what they could do with finding out.
The e-petition for compulsory financial education never did make much sense. It is not getting any better after promoter Martin Lewis claimed his latest champion. Lewis, founder of bargain-hunters’ website moneysaving expert, says 200 MPs have signed the petition. That’s getting on for a third of all MPs in the Commons. Today he reveals that shadow chancellor Ed Balls is a supporter.
Bear in mind that the point of the e-petition is to secure a parliamentary debate. If 200-plus MPs, including the shadow chancellor, lack the influence, ability or nous between them to organise even a parliamentary debate… they must be the most clueless bunch of legislators imaginable.
It doesn’t make sense. Legislators don’t try to influence policy by signing petitions set up by the public. It’s absurd. Someone is mocking someone.
It could be argued that the e-petition is necessary and useful as a litmus-test of public opinion. If a high proportion of the public back a move, MPs ought not to ignore it. The trouble is that the moneysaving expert numbers don’t look very good. Currently 64,000 people have signed the e-petition, which was launched over a month ago. The moneysaving expert website claims that 8 million people from the UK visit the site every month. In other words, the support among Martin Lewis’s loyal followers is around 0.8 per cent. The petition is not backed by 99.2 per cent of those who visit his website. What kind of mandate is that?
Can people learn how to spend their money in ways that increase their happiness? Some psychologists think so. Here’s the second part of a summary of serious research into the best ways of spending money. Drawn from a study by Daniel Gilbert (pictured) and others, it was published in the Journal Consumer Psychology. The full article If money doesn’t make you happy, then you probably aren’t spending it right is also available online as a pdf.
Principle 5: Pay now and consume later
Consume now and pay later is known to be bad, for obvious reasons. You satisfy your desires as fast as you can and don’t think about the future. That future, when it comes, can be awful, because of the debts you now have. But there is another reason why consuming first doesn’t make people happy. It eliminates anticipation, and anticipation is a source of “free” happiness. Planning a holiday, for example, may provide more pleasure than actually having it. People who devote time to anticipating enjoyable experiences report being happier in general.
Principle 6: Think about what you’re not thinking about
We have a tendency to blur details about proposed spending, in ways that mislead us about how happy it will make us. This is especially true of events that are far away. Having a regular job and a flat in a city might seem like a blissful condition. But those life circumstances don’t actually affect our happiness so much as the day-to-day life events. If getting a smart city flat means you have to work longer hours, and no longer have time for your old friends, it may not be such a good deal for you. Think carefully about a typical day in your life hour-by-hour and you’re likely to be more realistic about whether a single purchase item will really make you happier.
Principle 7: Beware of comparison shopping
Yes, you can pick up bargains and, sometimes, save money. But comparison shopping focuses attention on particular attributes of products, which may be very different from the ones that are important for your happiness. When you’re using a product that you bought, the ones you didn’t buy don’t figure too much in your thinking. So you could get an undisputed bargain, but be dissatisfied with it, because actually it wasn’t what you wanted.
Principle 8. Follow the herd instead of your head
The best way to predict how much we will enjoy an experience is to see how much someone else enjoyed it. Get used to listening to other people, and trust their reports on their actual experience rather than your own assessment in advance. Another odd discovery from research is that other people who pay attention to you, and who have your interests at heart, might be better at determining what you will like than you are yourself. One reason is that they can see your very revealing non-verbal reactions to the idea.
heir everyday expenses. The charity interviewed 17 key staff and 51 of the disadvantaged young people it works with (and some of their friends) about the new Bursary Fund. It found evidence of young people unable to meet basic needs and skipping meals in order to keep attending college courses.
