Following these helpful steps could set you on the right path to better financial management skills, and stronger financial resilience.
In 2023, it was reported that 2.5 million households were at high risk of vulnerability. The Financial Conduct Authority's 2022 Financial Lives Survey also illuminated this issue, revealing that 47% of UK adults exhibited at least one characteristic of vulnerability. These individuals are often caught in a precarious financial balance, where life events like job loss, divorce, serious illness, or mental health conditions can swiftly tip the scales towards instability.
But there is hope, and it is possible to turn your financial help around. Following these helpful steps could set you on the right path to better financial management skills, and stronger financial resilience.
Consider open banking
Amid these challenges, open banking technology is a promising solution. By allowing customers to share their financial data securely with third-party providers, open banking offers a new way for people to manage their finances more effectively. They can also help financially vulnerable people to improve their financial education and manage their budgets and debts more efficiently.
It can provide a detailed view of an individual's spending habits, identifying patterns that may signal financial distress, such as erratic spending or reliance on high-cost credit. These technologies can also simulate the future impact of cost-of-living increases on an individual's finances, offering a clearer picture of potential vulnerabilities that could lie ahead.
Complete benefit checks
Financially vulnerable individuals need to check for benefit eligibility. If valid, they can receive all the financial support they're entitled to. You can use benefit checkers to confirm your eligibility for government benefits and support schemes, such as Universal Credit, Housing Benefit, or Council Tax Reduction.
You can also utilise free debt advice services offered by organisations like Citizens Advice and StepChange for personalised advice.
Food and essentials
Plan meals in advance to reduce food waste and costs. Buying store brands and shopping for discounts can also save money. You could also use community resources like food banks if necessary. The Trussell Trust network offers support across the UK. Check their website for details on your nearest food bank.
Avoid high cost credit
Be cautious of payday loans and high-interest credit options, as they can lead to debt spirals. Consider credit unions for lower-cost borrowing options if necessary.
Community and support networks
Engage with local community groups and online forums for support, advice, and sharing resources. Mental health support is also crucial, and organisations like Mind offer resources for those struggling with financial stress.
Looking for professional advice and ethical financial support? At Great Western Credit Union, we are committed to serving our local people, businesses and economy. We believe in making finance more inclusive and accessible so nobody is left behind. To find out more about how we could help improve your financial resilience, email us at info@gwcu.org.uk or visit https://greatwesterncu.org.
