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.
Innovation and vulnerable consumers
Facilitated conversation hosted by Dr Elizabeth Blakelock, ESAN Trustee on Monday 15 March 2021 on MS Teams.
The aim of these discussions is to meet each other and share our ideas. Members want to find ways across the essential services sectors for overcoming the barriers faced when trying to innovate to ensure inclusion is at the heart of the information they rely upon; and to identify ways to incorporate best practice.
Each participant was asked to introduce themselves with an example of bridging the gap between innovation and vulnerable consumers that they have encountered and like. These included:
- Ofgem’s work on vulnerability where team members had joined researchers to hear directly from vulnerable consumers about their experiences.
- An example of a well known financial services institution which had changed the terms of provision of service to meet vulnerable consumers circumstances.
- A group of services providers and mobile phone handset manufacturers in the US who had teamed up to offer cheap data packages for those in financially vulnerable circumstances.
- Work on interim contracts undertaken as part of the Fair by Design work and the importance of building in lived experience.
- The innovation link team which provided fast, frank, feedback to proposals submitted to the energy innovation sandbox
- In the water sector, United Utilities role in a town action plan, working with the council going from door to door to sign people up to the priority services register.
Participants were asked to undertake a big picture exercise.
- ESAN members had suggested creating a one stop shop for ideas.
- 50 per cent of the ideas coming to innovation sandbox would be consumer focused.
- Develop a gap identifier tool eg a database of vulnerability.
- An awards scheme/competition for the most innovative idea for responding to vulnerable consumers needs.
- One place to sign up for vulnerable consumers to sign up for all the support they need.
- One place to declare for individuals to declare vulnerabilities.
- Research communities eg the Money and Mental Health Institute to act as a conduit if you have a product you want to test
Participants were asked to describe a micro idea to move towards the ideas suggested.
- Set a benchmark eg 50 % of sandbox ideas to benefit vulnerable consumers
- Tracking how many ideas come through? Innovative ideas help consumers across the board – so thinking of the how.
- Should there be a clear quota or target set?
- Expand categories of eligibility for a Priority Services Register.
- Proof of engagement with consumer groups or reps – (would need to test this was happening in practice)
Participants were asked for their ideas for innovation?
- Identifying gaps in databases and using these as a source of insight.
- A shared understanding of the type of characteristics that represent vulnerability eg focus on health conditions.
- Is there is a gap in the market where it is feasible to provide services for vulnerable consumers.
- Engage those in vulnerable circumstances to determine what is needed and how delivered.
- Take a collaborative working approach.
- Identify the uses by multiple stakeholders so they have to speak to different processes.
- Where are the gaps? Go and ask what people would like that they can’t get
- Participants were asked: What should be the next idea for innovators?Compile a list of organisations who might front an award eg Utility Week, BEIS, Sustainability First.
- Take a Which? style approach so vulnerable consumers know where to turn to.
- Ask Martin Lewis to highlight.
- Try to raise profile of innovative solutions for vulnerable consumers
- Profile and trust to make it land
Participants were asked: What is your ‘tell us once’ idea?
- Please retweet my report.
- Check legal constraints on doing it.
- Legal constraints aren’t the barrier – it’s the will.
- Keep the conversation going.
- Use recognised training materials eg Money Advice Trust
- Digital projects – ask vulnerable consumers to make videos etc about what they want?
Summing up, Dr Blakelock thanked everyone for their participation and encouraged them to share any further thoughts once they have reflected on the meeting notes, including on best ways to share our ideas.
People living in water poverty and fuel poverty
ESAN-NEA webinar Monday 17 May 2021
Jess Cook, Project Development Manager, National Energy Action (NEA) gave an overview of the NEA work programme working towards the eradication of water poverty. The presentation highlighted the links between fuel poverty and water poverty, the need for consistent measurement, the support that can be offered to customers in water poverty, the consequences of inaction for water poor households, and the role of water efficiency in the affordability journey.
The discussion that followed considered whether examples of of best practice from water that other sectors could learn from and the range of support available. The definition of fuel poverty works on a reasonable cost basis for that housing type, not actual energy costs, which makes it difficult to compare with water. The key is to unlock data and make support appropriate to need. Work around the Digital Economy Act, the Priority Services Register and other initiatives can be used as proxies and help to identify those users who need assistance around managing.
Participants also shared examples of directing consumers to advice services. The Citizens Advice service and other local community organisations play an important role and, in some instances, are able to passport consumers onto financial support schemes; and ensure that companies have partnerships with National Debtline and StepChange Debt Charity among others.