ESAN Events

The Poverty Premium: A consumer perspective

Online webinar hosted by ESAN on Microsoft Teams on Monday, 22 February 2021

The meeting was chaired by Dr Elizabeth Blakelock, ESAN Trustee. The speaker was Carl Packman, Fair by Design’s Head of Corporate Engagement. 

The focus of the discussion was a report from the Personal Finance Research Centre,  looking at recent changes in relation to the poverty premium (the extra costs of being on a low income)  to understand how the costs and types of poverty premium have changed in the last few years. The report contains insight into how low income households experience these extra costs and explores what is needed to help them access goods and services at lower prices. The research was commissioned by Fair By Design and Turn2Us.

Carl introduced his presentation outlining Fair by Design’s poverty premium work, the background to the research report;  the methodological approach and how this differed to the previous research undertaken in 2016. The poverty premium figure of £478 was based on a survey sample derived from Turn2Us data and survey of their clients.  

Carl highlighted the market changes between 2016 and 2019 that had impacted materially on the poverty premium, such as regulatory interventions from Ofgem on pricing and capping. Price caps applied to some high cost credit products had led to some fall in price but others had increased. 

Fair by Design (FBD) will use the research evidence to focus and direct their efforts, with some markets needing more urgent attention.  The findings also have policy implications, for example, the need to revisit the FCA general insurance market study which excluded from scope those who did not have insurance.   FBD and National Energy Action (NEA) would like the Warm Home Discount Scheme (WHDS) to be extended and applied automatically.  A BEIS consultation was expected in March/April.  FBD hoped that the no interest loans scheme (NILS) for white goods/affordable credit,  announced by the government in 2018, would be piloted soon.