Identifying vulnerable communities at risk of being left behind in a cash-lite society

By Daniel Tischer, Sara Davies & Jamie Evans

These days it’s common to hear discussion of the UK being on the verge of becoming a ‘cashless’ society – but, for a range of reasons, this may be premature. For the foreseeable future, a more appropriate term may be ‘cash-lite’. In this blog, Dr Daniel Tischer reflects on our research in South Wales in which we explore a new method for identifying and protecting the most vulnerable communities in a ‘cash-lite’ society.

Much recent commentary suggests that the UK, and a number of other countries, are rapidly moving towards becoming ‘cashless’ societies – but there remain multiple hurdles standing in the way of ‘cashlessness’. One such hurdle is that digital payments do not yet quite match cash for reliability: technical ‘glitches’ too often stop us from paying digitally. The (partial) outage of the VISA network in June 2018, for example, left many Europeans unable to pay by card, and other, smaller-scale incidents are not infrequent either. There are also big hurdles related to consumer needs and preferences, or the unsuitability of digital in certain circumstances (for example, in areas with no / a poor internet connection).

This leads to the conclusion that, in the near future at least, the UK will not become cashless. Rather it seems we are becoming a ‘cash-lite’ society – one in which cash usage is forecasted to decrease to about 1 in 10 transactions by 2028 – mirroring the experience of other low-cash countries, such as Sweden and Canada.

Vulnerability & the poverty premium in a cash-lite society

So what does a cash-lite society mean for consumers? Well for most people, most of the time, there will be few problems – but that does not mean that there are not significant risks that need to be mitigated. As fewer transactions are made in cash, more ATMs will be closed down or switched from free to fee-charging – and, as we saw both in our case study of Bristol’s cash network published in May last year and in national research from Which? in September, the latter of these is an issue which disproportionately affects more deprived areas.

Paying to access cash was a component of the University of Bristol’s ‘poverty premium’ calculations in 2016, albeit a relatively small one, and this suggests that vulnerable communities may be left even further behind. Even a small charge of £1 per transaction present a significant cost to low-income households, especially when only small sums—£10 or £20—are taken out to purchase basic food items or pay bills.

Identifying and supporting potentially vulnerable communities

As our society becomes more cash-lite, there is a danger of increasingly uneven access to cash across the country. This makes it important that we are able to map and identify those areas that are not only losing their ability to access cash but are also less resilient to such changes taking place.

Our second report on access to cash, published in January 2020, therefore advances our methodology from our Bristol case study to identify communities in South Wales that are most ‘vulnerable’ in terms of access to cash. We identify vulnerability in two steps: 1) by considering their current ability to access cash – where AvCash Index scores under 5 highlight communities with a low number of ATMs or other cash infrastructure within a 1km radius; and 2) by taking into account communities’ ability to cope without such access. The latter involves the construction of a measure of travel difficulty, indicating that a high proportion of residents in an area may find it difficult to travel far to access cash (or other essential services, for that matter). This measure incorporates: levels of car ownership, disability, age, income and access to public transport (in the form of nearby bus stops).

Looking at communities with poor access to cash and a high proportion of residents who may struggle to travel to access their money, provides us with a clearer idea of where poor cash infrastructures may have the highest negative impact. While this of course does not mean that there will not be individuals in other areas for whom access to cash is a problem, it does offer a useful tool for the industry to prioritise need – for example, when evaluating communities’ requests for a new ATM or identifying which ATMs to protect through additional subsidies. Indeed, as shown in the map below, there are many vulnerable areas without protected ATMs which may benefit from them:

Map of vulnerable areas & protected ATMs

Overall, we find that over a quarter (27 per cent) of neighbourhoods in our case study fall within the 20 per cent worst areas nationally for travel difficulty and have an AvCash Index score of less than 10. Similarly, 8 per cent of areas score poorly for travel difficulty and have no free ATM, while a further 12 per cent of areas have just one free ATM and high travel difficulty. These neighbourhoods are not solely rural; many are located on the outskirts of towns. Taken together, we find that over 100,000 people in this region (out of approximately 500,000) live in vulnerable neighbourhoods and do not currently benefit from a protected ATM.

Our geographical mapping approach therefore presents a potentially valuable tool to identify vulnerability by taking a community-based perspective. It raises further questions about the sustainability of the UK cash infrastructure and the ability of LINK and regulators to reign in private and profit-driven actions by providers of access to cash.

But crucially, we believe that our approach provides policy-makers and regulators with additional insights into the impact current changes have on the most vulnerable communities, and to better understand what vulnerability means in particular contexts. We are hoping to work closely with stakeholders to map access to cash nationally to inform policies towards ensuring cash is available for free to those for rely on it.

 


Read the full report here:

Report: ‘Geographies of Access to Cash: Identifying vulnerable communities in a case study of South Wales.’

Voices from the frontline of debt advice – new research on supporting clients in vulnerable situations

by Sharon Collard and Jamie Evans

In this post, we explore key findings from our new research, which looks at the experiences of nearly 1,600 debt advisers when supporting people in vulnerable situations.

At the recent Talk Money conference, we launched new research, in partnership with the Money Advice Trust and the Money and Mental Health policy Institute, looking at debt advisers’ experiences of working with clients in a range of different situations that might make them ‘vulnerable’.

The research was based on a UK-wide survey of 1,573 debt advisers working in approximately 400 organisations and included new data from a survey of nearly 400 individuals with lived experience of mental health problems and debt.

The report, Vulnerability: the experience of advisers, brings together these new findings along with good practice guidance for supporting those in vulnerable situations.

So, what does the report actually tell us?

1. Vulnerability is an everyday occurrence for advisers

Firstly, it’s apparent that advisers across the sector are dealing with clients in very vulnerable situations on a regular basis.

Of the 87 clients that a typical full-time adviser deals with in a working month, they can expect 35 to disclose a mental health problem. A further seven clients tell them about an addiction of some sort, be it a gambling problem, alcohol problem or other substance addiction.

Each week, nearly two-thirds of advisers encounter at least one client with a serious physical illness or disability, over a third see someone with a learning disability and one-in-five help a client who is, or has been, in an abusive relationship.

Lastly, in the last 12 months, nearly three-quarters of advisers encountered at least one client who disclosed suicidal thoughts, and over half seriously believed that at least one client was at genuine risk of suicide.

2. Levels of vulnerability may have increased in recent years

As this is the first time that levels of vulnerability have been measured across the whole advice sector, it is hard to say precisely how things have changed over time.

However, there is certainly anecdotal evidence from the advisers we surveyed that they are seeing more people in more challenging situations than ever before – with the risk that financial vulnerability exacerbates other types of vulnerability and vice versa.

3. This may just be the tip of the iceberg

For the purpose of consistent measurement, we asked advisers in the survey to tell us about those clients who disclosed their situation, rather than all clients that they believed to be in such a situation. This means that our statistics could represent just the ‘tip of the iceberg’.

Indeed, in our survey of advice clients with mental health problems, we found that as many as 44% of people with mental health problems may not disclose their condition when dealing with a debt adviser.

This could equally apply to a range of other situations, such as domestic abuse and addictions. Clients will not tell advisers everything just because they are there to help them and understanding the reasons for under disclosure is important.

4. More support is needed to help advisers deal with these situations

The primary goal of debt advisers is, of course, to help people resolve their debt and money problems; however, in many cases these financial issues cannot be resolved without considering the underlying situation.

Our data shows that more could be done here. For example, at present, 44% of advisers have not received any training on supporting clients with addictions and 56% have not received training in relation to gambling.

Such training though is on the way via the Trust’s Wiseradviser programme which is launching addictions and suicide prevention courses in the New Year.

It is also apparent that many people in vulnerable situations find it challenging to go through the debt advice process. For example, of those we surveyed with mental health problems, 48% reported that making initial contact with the advice agency was difficult, while 56% encountered difficulty in finding the information advisers needed from them.

The guidance and practical tools in our report can help advisers consider some of these issues.

5. But changes to debt advice alone are not enough

Our research also looked at the wider issues that affect advisers’ ability to support those in vulnerable situations. This highlighted the fact that many advisers felt they are working in an environment which makes it difficult for them to provide the very best support for their clients.

It takes time, money and resources to provide the right support, and in many cases advisers felt these are severely constrained. Advisers also noted that there are often situations where clients could benefit from the support of external services, but these simply do not exist locally or are already over-stretched.

While these bigger issues require co-ordination and collaboration from the advice sector and beyond, we hope our research and guidance give frontline advisers and advice organisations some useful additional tools and resources to support their invaluable work with clients in vulnerable situations.


Vulnerability: the experience of debt advisers was funded by the Money Advice Service. The report is available to download here, where you can also find data tables and a resource pack with additional tools to help advisers support those in vulnerable situations.

Further information about Wiseradviser training is available here: www.wiseradviser.org.

This article was originally published as part of the Money Advice Trust’s Thoughts at the Trust blog series. Read the original article here.