4.3 million people across the UK turned to charities for help with money problems over the last three years, according to new research published by Lloyds Banking Group and its charitable Foundations.
The report, Financial Resilience and the Role of Small Charities, reveals that for those facing financial insecurity:
- Charities are the second most trusted source of advice after family.
- 90% of people who visited charities for financial advice were satisfied with the support they received.
- People who visited charities were significantly more likely to say that they feel more financially stable than before, compared to those who hadn’t visited charities (35% vs 29%).
The report, which was commissioned jointly by Lloyds Banking Group and its four charitable Foundations to mark 40 years of supporting communities across the UK and Channel Islands, examines how charities support those who are financially vulnerable and how to strengthen that support.
Charities in the UK play a vital role in supporting those facing hardship, as more than two-thirds (69%) of people who took part in the research cited financial advice as a key reason for seeking support. Of those who reached out to charities, most were worried about paying for essentials such as food and energy (72%), followed by concerns about paying off debt (48%).
Faced with financial hardship, people turned to multiple sources for support, including family (59%), charities (50%), and friends (39%) – charities are the second most trusted source of guidance, after family. More than half (51%) said stigma and embarrassment were the main barriers to seeking support, but many respondents shared their personal experiences of how charities helped them overcome feelings of embarrassment.
Charities with a wide range of remits respond to service users’ financial challenges as part of the holistic support they offer. Half of the charities surveyed state that all or most cases they deal with relate to financial issues, yet only 5% of the charities surveyed had financial wellbeing as their primary focus. 90% of people who visited charities for financial advice were satisfied with the support they received and were more likely to say they feel financially stable than before, compared to those who had not visited charities (35% vs 29%).
Small charities are offering vital financial support, such as help accessing government benefits, food bank vouchers, and support with housing costs and rental arrears, to address immediate needs. A quarter are offering education, including debt advice and financial literacy (26%), money management (17%) and digital skills (14%), recognising the importance of building longer-term financial resilience.
95% of charities agreed that more funding would enable them to provide enhanced financial wellbeing support. Yet, more than half of the charities surveyed say they lack the staff and volunteers needed, 33% need more resources, and 26% say they don’t have the skills or systems to support demand.
Matt Hyde, Chief Executive at Lloyds Bank Foundation for England and Wales, said:
“These findings are a huge endorsement of the role and impact community-led organisations have on those most in need. They are doing incredible work, supporting people to build their financial resilience and make sure they’re in a good place. Through our partnerships and skilled volunteering programmes, we have seen the potential that can be unlocked when businesses and charities work together. We hope that this research encourages more partnership working to help local communities.”
The research found that only 14% of small charities working on financial resilience currently have partnerships with financial organisations and 6% with a tech, despite more than two-thirds believing collaborations would empower them to help more people and do more for their beneficiaries.
WODIN (Women and Digital Inclusion) is a Liverpool-based charity supporting migrant women. It received a £75,000 grant from Lloyds Bank Foundation for England and Wales. Through the Foundation’s Skills Exchange Programme, Lloyds Banking Group volunteers worked with WODIN to support the CEO with managing the charity’s finances, helping build a customised Excel-based cash flow system, allowing WODIN a high-level view of finances and confidence to make strategic decisions.
In the past 18 months, WODIN has helped 47 women secure paid or voluntary work, provided emergency support to 185 families and delivered food parcels that have reached more than 1,900 people across Merseyside. Many of the people WODIN supports are living in poverty with no recourse to public funds. WODIN has created an online cost-of-living solutions hub, helping the community to build financial resilience.
Sylvia Kalungi, WODIN’s CEO said:
“This support enabled our ability to build a long-term operational and business strategy, support staff time for project administration and outreach campaigning. It more than doubled WODIN’s services in the community while attracting stakeholders passionate about ending digital poverty. Far too many people are finding it a challenge to survive due to the cost-of-living crisis and inflation. We are committed to bringing the change that is much needed in ethnically diverse communities in Liverpool.”
To celebrate its 40th anniversary, Lloyds Banking Group and its four charitable Foundations developed a collaborative £4.2 million Financial Resilience fund. Every charity that is supported through the fund will have access to Lloyds Banking Group’s Academy resources and skilled staff as mentors and coaches.
Lloyds Banking Group has donated £800 million to its charitable Foundations over the last 40 years, enabling them to support nearly 70,000 charities across the UK and Channel Islands. The Group has also committed to providing £100 million to the Foundations by 2030.
To view the full report, visit: Financial Resilience and the Role of Small Charities.
