Young people are an easy target for finance companies that want to lend money, particularly vulnerable young people. A recent survey of 100 hostel-based 16- to 25-year-olds by youth homelessness charity Centrepoint appears to confirm this, revealing that two out of three residents have received promotional literature from firms offering loans and credit cards (YPN, 13-19 April, p2).
Spiral of debt
Anthony Lawton, chief executive of Centrepoint, says: "Our research identified five key reasons why young people get into debt: low incomes; problems with benefit administration; poor financial literacy; lack of access to affordable credit; and the amount of credit they are tempted with at such a young age."
The findings persuaded the charity to call on the Government to introduce financial education in youth work settings and free, approachable financial advice for all young people. "At a time when rising debt levels are causing concern for society, it is important that these vulnerable young people are adequately protected and supported," says Lawton.
The prospect of tutoring young people in financial matters can be daunting for youth workers, but guidance is on the horizon through pilots trialling the development of financial capability in young people - government speak for the knowledge people need to avoid debt.
The pilots are funded by the Financial Services Authority (FSA) to inform a national strategy to improve financial capability across the UK. Young adults are one of seven priority areas, and a working group has been set up to gather examples of best practice.
One organisation involved is Fairbridge West in Bristol, where workers received specialist tuition on subjects such as budgeting from organisations including the Bristol Debt Advice Centre. Staff plan to set up a credit union collection point at their Bristol centre, to encourage young people to use more affordable means of credit.
Frances Harrison, manager of Fairbridge West, cites "reality therapy" as important in addressing financial issues. "It encourages young people to think about what they need in their lives and where money could be a problem, and it gives them some control over it," she says. "A personal finance course isn't particularly attractive to the young people we're dealing with. We're hoping this stealth approach might be more successful."
The expertise of financial organisations has proved invaluable, says Harrison. "It's not possible to equip staff with the knowledge of a debt adviser or somebody who runs a credit union," she says. "In the first instance, the best thing is to have an awareness of who the experts are and how to work with them."
Ask the experts
This is the aim of citizens advice bureaux in Basildon, Oldham and Norwich, which are funded by the FSA to develop training for professionals working with young people, including youth workers and youth offending teams.
Tansy Miller, project officer at Norwich Citizens Advice Bureau, says the pilots combine the expertise of bureaux with the approachability of youth workers. "People know and trust us for debt advice, but it can be really intimidating for a young person to go into an office they don't know," she explains.
But the FSA is looking beyond the pilots to gather best practice. Inspiration can be found in Pay4IT, a Learning and Skills Council-funded partnership between Financial Inclusion Newcastle, Newcastle College and Newcastle Citizens Advice Bureau.
Since May last year, the scheme has delivered a programme on subjects such as credit, budgeting and bank accounts to 16- to 24-year-olds through schools, community groups and learning providers.
The partnership also delivered three days of training on financial capability issues to advisers from Connexions Direct, which is also based in Newcastle.
Dawn Badminton-Capps, operations manager at Financial Inclusion Newcastle, says: "It's not rocket science. But financial information is a highly sensitive area for anybody. It's no good saying, 'you shouldn't have got that store card'. The fact is they have got it and it's something they have to address."
