Councillor Philippa Roe, Leader, Westminster City Council
London Mutual Credit Union
I am writing to you personally to urge you to take urgent action to assist London Mutual Credit Union to open up premises in Pimlico, Church Street and North Paddington so that they can offer help to the thousands of social housing tenants who may face financial difficulties over the coming months.
The problems that will be faced by many of Westminster’s social housing residents is well illustrated by a report from the Circle Housing Group based on a survey of 1,444 people across their tenure types.
Faced with what Circle’s Chief Executive, Mark Rogers, calls a ‘perfect storm’ of ‘substantial, high impact changes in their external environment, arriving all at once’ , the survey aimed to uncover the financial realities faced by residents. Even before the storm arrives, 30% said they lie awake at night thinking about money issues. Only 38% save on a regular or even an occasional basis although a large majority agreed that saving is important. 57% agreed that they would ‘like to be able to save but I never seem to have any money to put by’.
With Universal Credit on the horizon, which will be predominantly an online service, less than half felt confident using technology and only 55% have internet access at home. 4% do not have a bank account but many more are ‘underbanked’ in that they have a bank account but do not use it because they prefer to use cash. Circle says that ‘Many of our customers are not aware of the changes to welfare that are facing them and how these will affect them’.
Research by the National Housing Federation discovered that 89% of social landlords expect rent arrears to increase under Universal Credit and direct payments on a monthly basis. The Government says it will switch back to payment to the landlord if a tenant gets into trouble – but by then for many of them it will be too late. Once in debt, the fragile finances of many tenants – well illustrated by the Circle survey – will make it very difficult for them to get back on course.
London Mutual is a not-for-profit community based cooperative offering savings, loans and current accounts to anyone who lives or works in Westminster, Lambeth and Southwark. There are various products available with reasonable rates of interest www.creditunion.co.uk.
Shopping parade premises in Pimlico, Church and North Paddington would give Westminster residents direct access to their value-for-money services and keep them out of the clutches of the legal loan sharks who charge around 4,000% annual interest. I urge you to act now.
Councillor Paul Dimoldenberg