Sunday, 30 September 2018

Your Money Matters ...with Ripon Ray (First Half)

On this part of the weekly money show I explore the importance of making a will for your loved one. Why is it important making it? What could happen if you don't have a will? What are the ways of making it and potential risks involved with these options?  I also look at ways for you to save money on your fuel supply - this is my tips of the week.

Thursday, 27 September 2018

Your Money Matters...with Ripon Ray (Second Half)

This is your weekly radio show.  This time I talk about how to save money on your car insurance and  ways to protect yourself from scams.

Friday, 21 September 2018

My Campaign: No Poll Tax 2 campaign urges Town Hall to scrap controversial relief cut

Hard Times: Campaigners clash with council over council tax support. Photograph: Marco Verch.
A cross-party campaign is calling on Hackney Council to walk back a recent cut to tax relief and instead provide full support to the borough’s poorest residents.
The Town Hall came under heavy fire from anti-poverty charity Zacchaeus 2000 Trust (Z2K) in September last year after it announced plans to increase the amount of council tax paid by working age residents in financial hardship.
In order to offset government cuts, the council made the decisionearlier this year to go ahead with changes to its Council Tax Reduction Scheme (CTRS), increasing the amount paid by working age claimants from 15 to 17 per cent.
The No Poll Tax 2 campaign has now started a petition calling on the local authority to think again and provide 100 per cent support through a “fully funded Council Tax Benefit Scheme”.
Z2K campaigner Jen Durant said: “We strongly campaigned against Hackney Council’s plans to cut council tax support for people on the lowest incomes.
“While we understand the financial pressure local authorities are under, we see no reason why the council is choosing to push the burden of government cuts onto its poorest residents.
“We have long argued for a return to 100 per cent council tax benefit, and we very much hope Hackney will follow the lead of boroughs such as Tower Hamlets and Camden in reinstating full support.”
The cut to council tax support for roughly 27,000 working age claimants was made in response to a predicted £500,000 rise in the cost of the CTRS,  and against a backdrop of a fall in financial support from central government.
The council initially planned a 5 per cent cut – meaning those affected would have to pay 20 per cent of their bill – but the idea attracted sharp criticism from local political parties.
The Town Hall then settled on 17 per cent, effectively a 2 per cent cut, after a fraught consultation process during which a Z2K petition labelled the original plan “absurd”.
Modelling undertaken by consultancy firm Policy in Practice (PiP) predicted that the current 17 per cent rate would leave vulnerable households “more impacted than non-vulnerable households”.
Both Hackney’s Liberal Democrats and Greens have signed up to the No Poll Tax 2 campaign, which is pushing for the council to imitate other boroughs such as Tower Hamlets and Camden in offering 100 per cent council tax relief through the scheme.
Vice chair of Hackney Liberal Democrats Darren Martin said: “Nobody disputes that funding cuts to local government have left Hackney Council with difficult choices to make, but they do have choices.
“The neighbouring borough of Tower Hamlets with similar pressures to Hackney provides 100 per cent council tax support for its poorest residents and we believe Hackney Council should do the same.
“The funding pressures are not likely to get any easier in the next few years and the reality is that the cost of the CTRS will continue to rise.
“The answer is not to ask the poorest people to pay – the solution is to find the additional funding to safeguard the scheme and protect those who need it the most.”
Debt adviser and campaigner Ripon Ray added: “Asking people to pay contributions to council tax regardless of income or circumstances is regressive and amounts to a new poll tax.
“Hackney is attracting wealthy residents and many of them can pay more. It appears that there is lack of consideration for those who are unemployed, disabled, single mothers or zero-hours contract workers.”
The campaign is also calling for exemption of bailiff action for those on council tax support “as a matter of principle”.
Hackney Green Party campaigner Samir Jeraj said: “[Bailiff action] causes immense distress to people who are already under a lot of pressure and actually only ends up driving people further into debt.”
Responding directly to the petition, Hackney Mayor Philip Glanville said that offering 100 per cent relief would cost the council somewhere between £2.6 million and £3 million.
Mayor Glanville said: “That £3 million, it would have had to come from somewhere else, it would have led to further cuts in services.
“This isn’t the only service to the most vulnerable in the borough. There’s housing support, there’s our youth services, debt advice within the council, it’s equivalent to what we spend on libraries –  I don’t want to be going to look at these services for that £3m.
“I would say to the campaigners, we are absolutely with you that this should be a fully funded scheme. The people responsible are government, and they need to return that funding to the system.
“And until they do, it’s very hard for boroughs to make up that shortfall. Boroughs like Camden have a very different shortfall in terms of number of claimants and levels of council tax, so doing it here is not as easy because we have a lot more people in receipt of council tax benefit than Camden does.
“We did a really big consultation exercise last year. A lot of the same people were involved in that consultation process, and a lot of poverty action charities and organisations both inside and outside the borough made their views known.
“We listened, and stepped back from the proposals to increase the contribution to 20 per cent.
“We settled on 17 per cent because it met some of those deeper concerns about the impact of going to 20 per cent, but it still reflected the challenge of our financial position in making sure that the scheme was sustainable for the long term.”
Mayor Glanville added that the changes to the scheme would be reviewed half way through the term of his administration, and that “halfway through the first year of the scheme operating is not the time to suddenly change.”

Wednesday, 19 September 2018

Your Money Matters...with Ripon Ray

Alternative Lending - This week my focus is on payday lenders, credit unions & peer-to-peer lenders. What do they stand for? What are the differences between these lenders? What are the benefits of borrowing from them? I also talked about the risks involved when lending from these companies.

Tuesday, 18 September 2018

Your Money Matters...with Ripon Ray

Universal Credit: How does it work? What does it mean for claimants? How to claim it? What does it include and what does it not include? If you disagree with the Department of Work & Pension how do you go about challenging it? This show talks about all those things and more on Your Money Matters...with Ripon Ray

Monday, 17 September 2018

Your Money Matters...with Ripon Ray

Last Week's on Your Money Matters...with Ripon Ray:

Mortgage - how to get it? What are the criteria behind getting a mortgage? What challenges you may come across when you apply for a mortgage? Robert, an independent financial adviser from Bond Wealth LTD, is in the studio. He talks about all the above and more.

Thursday, 6 September 2018

Ethnic Minority Communities are in extreme poverty in East London

I recently advised Shazna Rahman*, a Bangladeshi Muslim woman in Newham. She came to seek debt advice from me at Toynbee Hall, a charity in Tower Hamlets that helps communities in poverty. She was wearing full black burkah. This is a piece of clothing covering her body completely. It was not the manifestation of her faith that struck me most, but the reality of her difficult and hard life. Her children were taken away from her by Social Services because she was unfit to look after herself and her children due to a highly traumatised divorce that resulted in a mental breakdown. She moved from Tower Hamlets to Newham into private accommodation. She claimed housing benefit to pay for her rent.  After a few years, she became homeless when her private landlord wanted to rent the property out to a professional couple who would pay more. Newham council put her in temporary accommodation because she was deemed in priority need due to her mental health.

Her personal circumstances made me think about the state of poverty that many ethnic minority residents in Newham, Tower Hamlets and Hackney experience. These boroughs are in the heart of the East End. Ethnic minority residents form a significant proportion of the population in these boroughs. According to Newham Council’s data,  46% of the borough’s population are Asian and 18 % are black - Afro-Caribbean.  In Tower Hamlets, 41% of the borough’s population are of Asian background,  32% of whom are of Bangladeshi origin. In Hackney, the largest ethnic minority group is Afro-Caribbean at 23.1% followed by Asian at 10.5% according to 2011 Consensus.

Shazna’s initial contact with me over a year ago was about her inability to pay £27,000 in loans and credit debts. I was able to support her with a temporary outcome by offering minimum payment to her creditors. But there appears to be an endemic problem in the East End according to research carried out by the Money Advice Service.  I began wondering how prevalent indebtedness was in her borough. Newham has been categorised as the UK capital of indebtedness.  22.7% of its population are in debt. Tower Hamlets has the same level of people in debt as Newham.  Hackney was not far from it - 20.9%.

There is a correlation between ethnic minority communities in these boroughs, and their disproportionate impoverishment in East London. According to the Trust of London, 37% of the population in Newham live in poverty; in Tower Hamlets it is 39%. Hackney’s poverty rate is just below Newham and Tower Hamlets at 36%.  This may be due to gentrification which is higher. Bangladeshi children in Tower Hamlets were highly likely to be deprived. 43% of children in Tower Hamlets live in poverty; the highest rate in the UK. Black African children were identified as being the second most deprived group.  According to the Joseph Rowntree Foundation: 

1 in every 25 residents in Newham are in temporary accommodation and the prime cause of their homelessness is the ending of a private sector tenancy.  Shazna’s reasons of homelessness illustrate the true characteristics of many ethnic minority residents in Newham. She was given notice to quit by her private landlord’s desire to let his property to a non-benefit claimant. In Tower Hamlets, 4 in every 1000 applicants were accepted by the council as homeless.  In Hackney, the figure is slightly higher: 7 in every 1000 application.

Ethnic minority communities in these areas also hit hard by recent welfare reform. Bedroom Tax and benefit cap have reduced income from those who are in receipt of means tested benefits in all the three boroughs. Until 7 November 2016, a couple with children would be capped at £500 per week in London, whilst for single claimants it was £350.  From 7 November, the cap was reduced further for those who live in London to:

- £442.31 a week if you are a couple or have children and live in London
- £296.35 a week if you are a single person and live in London.

In Tower Hamlets, Universal Credit was rolled out in March 2017. Of all local authority tenants who were on universal credit following rollout, 83% were in arrears

From 24 July 2018, everyone who is of working age, and requires welfare benefit support is to claim universal credit in Newham. Data is yet to be analysed as to how communities in the borough have dealt with it. The roll out of the benefit will be extended to Hackney from October 2018. 

Local government budgets have been significantly reduced because of welfare reforms. To maximise local income, council’s in the country introduced policies where the poorest residents were required to contribute towards their council tax bill. In Newham, at least 20% of the council tax bill needs to be paid by working households regardless of whether they can afford to pay.  

It was the fear of not being able to pay her council tax bill that saw Shazna come back to seek advice from me a few months ago because her existing Employment Support Allowance did not cover the cost of paying what Newham council wanted her to pay. As a result she is now in arrears. The fear of the bailiff knocking on her door made her feel anxious and she wanted advice.  According to Money Advice  Trust, Newham Council made the most bailiff referrals in the last 12 months (2016/17) - 55,652. This is 50% of bailiff referrals as a percentage of the total properties according to Money Advice Trust. 

Following the direction of Newham Council, Hackney Council, from April 2018, reduced council tax support from 15 to 17% for its working age households. Individuals who are on Jobseekers Allowance and Employment Support Allowance will find that they need to prioritise between paying for food or the council tax bill. 

In Tower Hamlets residents have been exempted from paying council tax due to  their low income. Individuals who are self-employed, however, are deemed to pay full council tax without means testing their ability to pay for it.  This blanket approach has resulted in several Tower Hamlets residents seeking advice from me. Most of them are ethnic minority Bangladeshis.

Shazna’s experience tells me a great deal about the life of many forgotten minority communities in the East End. Welfare reform and policies are resulting in people  who were already in a precarious financial situation being tipped over the edge. The challenge for someone like Shazna is whether to pay her food or visit her local foodbanks.   Her burka, in my opinion, covers the harsh reality she is living in East London. When she began to feel comfortable speaking about her troubled life to me, after a few advice sessions, she no longer wore the burka.

*Shazna Rahman is not her real name. To protect her identity and privacy I changed her name and slightly changed her factual situation.

Saving & Spending Wisely on Your Money Matters...with Ripon Ray

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