All of us in the advice sector are worried about how the growing recession will affect our services and our clients who need them so badly. I asked Lasa’s former Policy worker to cast his mind back to his experiences advising during the last recession. His recollections throw up some worrying concerns about how we can retain a focus on our traditional clients – the poorest and most excluded in society- whilst at the same time developing services for the more articulate and (erstwhile) middle income clients who are already starting to make demands on our services.
Money advice: Being poor is relative. The richer your relatives, the better you will survive the recession.
When I started in money advice in 1985 pre the 1990 recession our client group consisted mainly of the long term unemployed, who having used up what little savings they might have had were being ground down by living on benefits for too long,
We concentrated on priority debts which normally meant rent arrears (private or council) and utility debts. People rarely had excessive credit debt. If memory serves, rental charges took up roughly 30% of a family’s available income.
Four years later as the recession was kicking in, our client group changed dramatically. Middle class owner-occupiers were facing interest rates of up to 15% and whether someone in the household had lost a job or not they were still finding it hard to cope with monthly repayments. Interestingly, even at the 15% high, the average family spent 25% of their available income on mortgage payments, some 5% less than that spent by families who were renting.
Even so, we were overwhelmed by owner-occupiers finding their way to our service and displacing our traditional clientele. Where previously our criteria of “home at risk” had pretty much selected local authority, low income or unemployed clients, we were now deluged with the multiple indebted owner occupiers, over extended, incredibly insistent and very articulate. And, of course equally deserving of not losing their homes.
Unfortunately though, when your service has finite resources if one set of users out competes another for access there will be losers. It was several years and a change of government before we saw our old “traditional” client group return. Of course, they had never gone away.
Posted by lasaceo 
