Saving and Borrowing: Use of the Social Fund Budgeting Loan scheme and Community Credit Unions

... A recent study of the Social Fund has shown that mail order catalogues and moneylenders are used for very similar reasons as Social Fund Budgeting Loans (Whyley et al, 2000). In the case of moneylenders, there was evidence that most pensioners had started to borrow in this way when they had young children and had remained customers for most of their life (Rowlingson, 1994). ...

... Similar barriers were identified in a study of people eligible to apply to the Social Fund (only a small number of whom were pensioners) (Whyley et al., 2000). ...

... This attitude was clearly mirrored in the views of people eligible to apply to the Social Fund -both by some who had applied and by people who had never applied. In contrast to credit union loans, they did not feel that they had an entitlement to a Budgeting Loan from the Social Fund and, consequently, some felt it was demeaning to apply (Whyley et al., 2000). ...

... Previous research has indicated that unsuccessful Social Fund applicants, and those who only receive a partial award, find themselves faced with a limited number of alternatives to obtain the items they need (Kempson et al., 2002;Whyley et al., 2000). This study was, therefore, commissioned by the Department for Work and Pensions to provide an in-depth understanding of what happens when people are refused a Social Fund Community Care Grant or are only granted a partial award. ...

... Unsuccessful Social Fund applicants and those who have received only a partial award find themselves faced with a limited number of alternatives. Previous research has shown that some people went without items they needed or bought them second-hand; others used commercial credit, got help from their family or, in a small number of cases, applied to a charity (Kempson et al., 2002;Whyley et al., 2000). ...

... This earlier research indicates that, while applicants may have a choice of credit sources, these tend to be costly and have considerable drawbacks (Whyley et al., 2000). Some older people may rule out borrowing altogether (Kempson et al., 2002). ...

... Recent research (Whyley, Collard and Kempson, 2000) indicates that the views of credit unions were generally very positive among the people who belonged to them, although some perceived them to be specifically for poor people while others believed they had wider appeal. Members had found out about their local credit union in a variety of ways, including credit unions' promotional activities or local-profile, wordof-mouth and from schools or play-schemes attended by their children. ...

... Some cards still involve a basic yearly charge (known as annual fee). 45 Adopted from Ford (1994) and Whyley et al. (2000). also. ...

... In particular, people liked the combination of saving and credit that both encouraged them to put money aside and also amplified their borrowing power. Around half, however, had drawn a distinction between saving and borrowing at the time they joined their credit union, and had been attracted primarily by one or the other (15). It is important to note, however, that whatever people's initial motivation for joining the credit union, the majority made full use of the services on offer once they had become members. ...

... In particular, people liked the combination of saving and credit that both encouraged them to put money aside and also amplified their borrowing power. Around half, however, had drawn a distinction between saving and borrowing at the time they joined their credit union, and had been attracted primarily by one or the other (Whyley et al., 2000). It is important to note, however, that whatever people's initial motivation for joining the credit union, the majority made full use of the services on offer once they had become members. ...