In this guest blog, Liz Barclay, broadcaster, financial journalist and Chair of the Money Advice Liaison Group explains why #TalkMoney is so important. Liz is chairing the Talk Money Conference on Thursday 16 November.
We need to talk about Money. It’s the last taboo. We’ll talk about sex, piles, religion and politics but we won’t talk about money – in many cases even with our partners (apart from house prices) and that needs to change.
Christmas is coming and we need to talk about spending at Christmas. The retailers are talking about it: non-food sales are down and they will be doing their utmost to entice us to spend, spend, spend over the next six weeks. It’s very hard to resist that pressure.
The average person in the UK has debts of £8,000 (not including mortgages) and 6 million don’t think they’ll ever be free of debt. 8 out of 10 have an outstanding balance on credit cards or loans and less than a fifth have been able to reduce those balances over the last 12 months. I have friends who still have debts from last Christmas and are about to embark on the whole venture again.
Years ago, my family members agreed to stop buying presents. Himself and I have a pact – the amount we spend on each other is capped at £20 (it’s been capped at that for years; maybe it’s time for a review.) We’ve discussed it with friends and agreed not to do presents. We get together, all contribute to the general merriment and go home happy – without resenting spending money we couldn’t afford or feeling someone else hasn’t pulled their weight.
We need to talk about debt. Andrew Bailey, head of the Financial Conduct Authority, warned in October that the increasing cost of living is forcing millennials into debt. He said “We should not think this is reckless borrowing. This is directed at essential living costs. It is not credit in the classic sense, it is [about] the affordability of basic living.” More than a quarter of people want to take out more credit (let’s call it what it is: debt) in the next six months and more than a third of those need more debt to pay for things like food and heating.
Debt leads to misery: eats away at relationships and self-esteem; means sleepless nights and fractious days; bills go unpaid leading to homelessness and mental health problems. Advisers are dealing with ever increasing numbers of people on the brink of financial catastrophe and there are millions of others who haven’t yet asked for help because they can’t talk about it or don’t know who to talk to.
We need to talk about the impact of rising interest rates. This week we saw the first interest rate rise in 10 years. Commentators have played down the impact that’s likely to have but for hundreds of thousands of households even an additional £12 a month on mortgage payments will mean something has to give.
That’s why the theme of this year’s Financial Capability Week is Talk Money, because we all need to do just that. FinCap Week is for any organisation working to help people improve their financial wellbeing: Toynbee Hall, CHASM – University of Birmingham, MyBnk, TechCity, Age UK, Young Enterprise and Open University’s True Potential Centre for the Public Understanding of Finance. Events are being run all around the UK.
At the Talk Money Conference this Thursday, delegates will discuss everything from whether it’s ever right to lend to people who are already grappling with problem debt and how technology can help people increase their financial capability, to how employers can talk to employees about money and help improve their financial wellbeing. I’m delighted to be chairing the event this year and look forward to seeing you there.
My challenge is that at conferences you often find the already converted are talking to the already listening. I want us all to get talking, at conference and all year round, about the impact of unaffordable spending and borrowing; debt and its devastating effects on families, health and wellbeing; what lenders and collections people (local authorities, utility/telecoms companies, government Departments included) can and should do to help people out of problem debt (and benefit their own bottom line).
I want us to talk and then act, together, to improve the lives of people in debt.