This National Care Leavers’ Week, MyBnk launches new thought leadership research on the financial education provided to care leavers by local authorities.
Gathering data from a UK-wide freedom of information requests to local authorities and surveys and interviews with care leavers and care professionals, our research shows 67% of care leavers feel anxious about money and 80% want more help managing their finances.
Despite financial education forming part of the ‘pathway plan’ to help care leavers transition to independent living, and 96% of local authorities saying they offer money management support, most care leavers surveyed couldn’t remember learning about these topics. As ‘corporate parents’, local authorities have a legal duty to protect young care leavers’ economic wellbeing and ensure access to financial information.
Key Findings:
- 87% of local authorities said it was not mandatory for care leavers to attend a course on managing personal finances. 89% of the care leavers we spoke to said they faced challenges when trying to access financial education support.
“It’s hard to break habits that you already have. If you’re not taught about managing money, you’re going to get into a habit of I’ve got this much in my bank and it will be gone in the next hour.” Care Leaver – West Midlands
- Most care leavers we spoke with said that contact with local authorities is infrequent and inconsistent. 40% of care leavers either don’t have pathway plan or aren’t aware if they have one or not.
- Care leavers said they have 2 main sources from which they get money management support: their personal advisor (71%) and a family member (61%) compared to 96% of local authorities that said they offer some sort of support.
“I don’t even speak to them. I was meant to be going to view a flat. They haven’t told me when I’m meant to be going. Nothing.” Care Leaver – West Midlands
- 55% of local authorities either don’t collect or collate information about care leaver evictions and 58% said that care leavers who have previously been evicted from local authority accommodation could face restrictions on future housing applications. Only 15% of local authorities reported actively working to prevent care leaver evictions.
- 94% of local authorities said they offer some form of support to personal advisors to help them to provide money management support to care leavers.
- Only 29% of care leavers we surveyed who had received financial education from their local authority said it improved their ability to manage money a lot. Just 36% reported being listened to, 33% having topics clearly explained and 31% reported it being relevant to their personal situation.
Key Recommendations:
- The Department for Education should work with a wide selection of stakeholders to provide local authorities with guidance about what financial education for care leavers should include.
- Local authorities would benefit from assessing their financial education offer against a diverse set of care leaver needs – from intensive, expert-led programmes through to assisted or self-directed learning from reliable and interactive sources of information, advice, and guidance.
- We urge local authorities that don’t collect or collate information about care leavers evictions to start doing so. With this information, they can understand the scale of the problem and can start resolving it by intervening early. This in turn could also help prevent serious financial distress through events like becoming homeless.
- Support from family, carers and peers can have the reach and impact where statutory support can’t. We advise that these groups gain guidance, information and signposting from local authorities to ensure they are getting it right.
A big thank you to our funders who supported this research – Berkeley Foundation and Trust for London.
Sign up for our virtual Care Leavers launch event on 26th October (5:30 – 7:30pm) to find out more.
Team MyBnk
