Four in five care leavers want more help managing money, research says

A charity specialising in financial education for young people has called for better support and training in money management for care leavers.

Gathering data from a UK-wide freedom of information requests to local authorities and surveys and interviews with care leavers and care professionals, the charity’s 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.

However, the vast majority (87%) of local authorities said it was not mandatory for care leavers to attend a course on managing personal finances. Only 29% of care leavers who had received financial education from their local authority said it improved their ability to manage money a lot.

Furthermore, nine in ten (89%) of the care leavers surveyed said they faced challenges when trying to access financial education support.

“It’s hard to break habits that you already have,” one care leaver said. “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.”

Most care leavers surveyed said that contact with local authorities is infrequent and inconsistent. Four in ten (40%) care leavers either don’t have pathway plan or aren’t aware if they have one or not.

The research showed that care leavers have 2 main sources from which they get money management support: their personal advisor (71%) and a family member (61%) – despite 96% of local authorities saying they offer some sort of support.

The issue of care leaver evictions was also raised in the research. Most (55%) local authorities either don’t collect or collate information about care leaver evictions and a similar number (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.

The charity is now calling on local authorities to assess 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.

It is also urging 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.