New research from our Strategic Partner, the financial education charity MyBnk, finds 67% of young people leaving the UK care system feel anxious about money, and 80% want more help managing their finances.
The research was funded by Berkeley Foundation and Trust for London and was launched at a virtual event on 26th October.
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.
The report comes as the cost-of-living crisis threatens to disproportionately impact young care leavers, who face financial independence from age 18, compared with the current UK average of age 24 for leaving the family home. Care experienced young people already have poorer life chances than their peers, with 1/3 losing their first home in their first two years of independence.
MyBnk’s study, formed of 145 Freedom of Information request responses from local authorities, and surveys and interviews with care leavers and care professionals, also found that:
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In 87% of local authorities surveyed it is not mandatory for care leavers to attend a course on managing personal finances.
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55% of local authorities either do not collect or collate information about care leaver evictions.
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Only 33% of care leavers said they received support managing money when they needed it.
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89% of care leavers said they encountered challenges when trying to access financial education support.
Ending the Financial ‘Cliff Edge’
The research launched during National Care Leavers’ Week, aimed at celebrating UK care leavers and asking what needs to be done to improve the system. This year, the campaign called on the government to ‘end the care cliff’, to ensure leaving care does not feel like falling off a cliff edge once young people turn 18. A postcode lottery of support is not good enough for those who need it most.
MyBnk’s report makes recommendations to improve life chances for care leavers. These include:
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Clearer guidance from Department for Education on financial education provision for care leavers.
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Encouraging local authorities to collect and collate data on care leaver evictions.
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Ensuring financial education for care leavers reflects diverse support needs.
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Encouraging providers to investigate how they can provide guidance, information and signposting to young people in their care, which may involve providing support to family, carers and peers.
You can read a full summary of the research here.
A former MyBnk course participant (care experienced) said:
“When you leave care, it can feel like you're suddenly on your own. Having access to a MyBnk money management course made me feel more in control of my finances during this time and gave me the confidence to know I'm on the right track. But a lot of other care leavers I know haven’t had any help with money. I think all young people leaving care need similar support, especially given the current cost-of-living crisis."
Guy Rigden, CEO, MyBnk said:
“We’ve frequently heard from care leavers that turning 18 can feel scary, abrupt and disruptive – leaving them to deal with the financial burden when they need stability the most. Our report calls for changes in the system to ensure young care leavers have the skills, knowledge and confidence to manage their money and ultimately live happy lives.”
Clare Maddison, Interim Head of the Berkeley Foundation said:
“We’re pleased to fund this important piece of research by MyBnk. The increased risk of homelessness facing young people with care experience is a concern and this report suggests more needs to be done to ensure they can move into independent living with the financial skills and confidence to thrive.”