Saving from Poverty
The Saving from Poverty (SfP) was established in 2005 to help poorer consumers budget and manage debt and at the same time promote financial inclusion and social justice. It is based on consumer centric, preventative and shared service principles and works with the grain of the market – reducing the higher cost-to-serve of poorer consumers for public and private sector service providers by over £700m pa. These savings are reinvested in improved budgeting services and lower tariffs for those consumers. We believe SfP will end need for the additional payments and higher tariffs (the poverty premium) that the poor now pay.
Our research suggests that the main reason for the 'poverty premium' is that providers of household services to poorer customers struggle with higher cost-to-serve, debt management and write offs. Whether this historical legacy is right or wrong, we at SfP want to see such costs reduced. Working with a sample of energy, gas and water companies we have identified that, on average, poorer consumers have a cost-to-serve at least 2.4 times higher than non poor customers.
SfP proposes an innovative solution that is none the less low cost and risk because it builds the following services onto the existing investment in the government card account:
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additional in-payments such as other central and local government benefits and weekly wages
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sub accounts for weekly budgeting and debt repayment across a wide range of public and private sector service providers. This facility is the equivalent of a weekly direct debit or an ‘electronic jam jar’
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an ‘honest broking’ facility across the bills/debt portfolio of vulnerable consumers – focussing on the consumer holistically not the individual bill or debt
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a ‘first stop shop’ for information and advice in areas such as lower tariff rates, additional benefits and grants, and tips on reducing energy wastage.
Please read our ‘Summary paper’ and further research from The Future Foundation (on the Library page) and contact us if you would like to know more or help.