The poor need help to get better deals

I met the personification of the spirit of Money Fight Club when I was a fellow panelist at the Money Advice Service’s Financial Capability Week at the QEII centre this week.  Vanessa Simao is a trainee with the Young Women’s Trust in London and an outreacher in Barking and Dagenham so she knows that to help clients in her work she has to share her own experiences as a single parent.
She knows what it is like to take a loan to provide food or heating and then to get behind and agree to consolidate the loans into one payment only to find that the new loan does not reduce the amount owed.
Sitting alongside  the head of policy and research at the Chartered Insurance Institute she clearly said when you do not have enough money for your basic needs you should not trust men in suits.  They want to sell you something.

By talking you can help the poor to find solutions

The first rule of Money Fight Club is that you talk about money and help other people through your experiences to get the right solutions.  Money is the last taboo.  Children do not talk to parents. Brothers and sisters or cousins all keep their money problems to themselves.  Sharing early will find solutions earlier.
People need to do the research and then choose what to buy, and not allow themselves to be sold to by salesmen on commission whether they are buying energy, clothes, food, bank accounts or mobile phones.
By talking openly Vanessa helps clients.   Newly in her job she is only a few steps ahead of them.  And her experience can help others to find answers.  She knows the questions?   Did the pay day loan company check what income the client had before giving them a loan?  They may qualify for compensation if no real affordability procedure was carried out.   The same applies to vulnerable customers who are stung with hefty overdraft charges for very small overdrafts.

Stuck on expensive tariffs and pre-payment meters

But she was most concerned about how the poor find it much more difficult to get good value than the rest of us.   They are stuck on standard energy tariffs or pre-payment meters, which are hundreds of pounds a year more than the special offers.  If you have a basic bank account that does not do direct debits you are excluded.
The high cost of pre-payment meters is particularly unfair because the customers have to pay up front when there is absolutely no risk of bad debt for the companies – only of the heat running out for the customers.  Vanessa is in good company as the parliamentary Work and Pensions Committee last week accused energy companies of overcharging their poorest customers by £440m a year.
We all need to talk about money.  When we get things wrong it is a better lesson for others.  We should also share good deals so that everyone can become a Money Fighter.  We all need to be a bit more like Vanessa.