Financial Inclusion

In March 2012, Susan, a widower in her 50s contacted Five Lamps to apply for a personal loan as she was having financial difficulties.

Vince Rogers, Five Lamps’ Loan Officer met with her to discuss her circumstances, establishing that Susan had a ‘Log Book Loan’ on her car with a Finance Company at a penal rate of 734%. She had borrowed an initial £550 over 6 months, to which was added interest and charges of £426. The total loan was therefore £926, requiring monthly payments of £163.

Having met her initial instalments, Susan started to struggle to meet the monthly repayments and was in danger of having her car repossessed; losing her main method of transport and her independence. She was becoming increasingly desperate, but heard of Five Lamps via Facebook – someone had posted a comment ‘If you are having problems contact Five Lamps they will help you!!’

At the appointment, Vince telephoned the Loan Company and obtained a settlement figure. A loan was quickly agreed and funds were sent to the Loan Company within a few hours of their initial face to face meeting.

Susan now has peace of mind, with affordable loan payments tailored to her disposable income, saving her around £120 per month. She said

“I’d never heard of Five Lamps before, but am so relieved you have been able to help me at such short notice. I feel like a weight has been lifted from my shoulders and I’m able to sleep at night for the first time in ages!!’’

Sheryl from Middlesbrough contacted Five Lamps to apply for a low cost personal loan and it was during the application process that it became apparent she had a number of serious financial issues.

Her case was passed to John Hird Five Lamps’ Senior Loans Officer who arranged to meet Sheryl and discuss her finances and to also look at all of her available options to resolve her problems. The issues related to previous creditors and for 2 outstanding water bills. Sheryl’s main concern was with the water company who were sending letters and threatening legal action if the matter was not resolved promptly.

After looking at Sheryl’s income and her current commitments, John contacted the two creditors and agreed reduced monthly payments on both accounts which were subsequently accepted.

The problem with the water company was not as straightforward, as they were preparing to put court proceedings in place. John contacted Northumbria Water and arranged an affordable monthly payment to pay this year’s bill with a smaller payment to reduce the outstanding arrears. Sheryl was still worried about the issue with the previous bill and the application for an attachment of earnings. This concerned Sheryl as she had just started a new job and did not want her employer to know of her previous financial problems.

After Sheryl received a letter threatening court action, she spoke to John again who contacted the water company who told him that a hearing date had been set. John raised Sheryl’s concerns regarding the attachment of earnings and her employer and asked if there was an alternative solution to the problem. The adviser promised to speak to the department handling the legal claim and attachment of earnings issue and try to resolve the matter as quickly as possible.

John received a call back within an hour to inform him that Northumbria Water were willing to postpone the attachment of earnings order and the legal hearing, they would also put a hold on this year’s bill and direct the agreed monthly repayments towards paying the previous bill first, then once that bill is repaid they would use the agreed payment’s for this year’s bill.

This was a satisfactory outcome and when John phoned Sheryl to inform her of the good news she was very pleased and grateful for the help from Five Lamps.

Sheryl said

‘The help from Five Lamps has made a big difference to my life, I no longer have to worry about my finances and can now concentrate on my new job and career. Thank you John’

Amanda and Michael from Middlesbrough were referred to Five Lamps from Middlesbrough Council through the ‘Helping Hands’ scheme.

The scheme is run by all North East Council’s and helps homeowners who are struggling to carry out repairs, essential home improvements or adaptions.

Amanda and Michael first met with Michael Sunderland, Five Lamps’ Loan Officer and it was whilst helping them through the process of their Helping Hands application that he noticed they had an arrangement in place with a Debt Management company. After Michael looked further into the arrangement it came to light that the company were actually taking 40% of the regular monthly payment as a charge for handling their case.

Michael chatted to them both and said that Five Lamps would be able to help them with this problem without charging a fee and he would refer them onto a colleague.

Michael referred the case to John Hird, Five Lamps Senior Loans Officer who arranged a visit and spoke to Amanda and gathered all the information regarding their current financial situation and chatted about the options available to them. When John had studied their finances and outstanding debts he was then able to put a case together and contact the 11 creditors.

As Amanda and Michael could afford the monthly payment they were making, John wrote to all their creditors offering to increase the current monthly payments being made. It was possible to do this because Five Lamps were offering this service free of charge so the money that was previously being taken as a monthly fee could now be put towards actually repaying more of the debt.

The good news is that because more money is being assigned to the debts they will now be repaid over a much quicker period helping Amanda and Michael to move on from this problem.

Amanda said

‘It’s great to know that all of our monthly payment is now being used to clear our debts and we will now pay them off much more quickly, thank you Five Lamps’

John said

‘This case shows the great team work in Five Lamps and we will always try to find a solution for a customer’s problem’

Michael Sunderland has continued to support Amanda and Michael to apply for an affordable loan through the ‘Helping Hand’ scheme so that essential improvements can be made to their home. Work is currently being carried out on their property to install new windows and repair work to their roof. Once work is complete, their home will be more comfortable for them to live in.

Since the start of the Helping Hand scheme, Five Lamps working in partnership with all 12 North East Councils have supported 334 homeowners with affordable loans.

Five Lamps have been helping people to manage their money through a ‘Capacity Builders’ course, which helps people to make a budget, understand what financial terms mean and also to cope better with their debt.

It also looks at what help is available for people if they are looking to get back into employment or self-employment. After the workshop, our customers have the option of a one to one meeting with a Five Lamps Loan Officer.

Linda from Hartlepool came along to a Capacity Builders workshop and explained that she was worried about her debt. John Hird, Five Lamps’ Senior Loans Officer contacted Linda after speaking to her Support Worker. Linda explained to John that her main concern was with 2 small loans from a Cheque Centre that had an annual percentage rate (APR) of 2,115%. If these loans are not repaid in full each month, Linda can incur a charge of £25.00.

Due to changes in Linda’s financial situation she had been unable to make the full repayment each month to clear the loan, so she was continually being charged £25.00 and was unable to clear the outstanding capital. Some months she could not even pay the £25.00, so incurred further charges.

When John had assessed Linda’s personal finances the best solution was for Linda to repay the Cheque Centre with the help of a Five Lamps low cost loan with affordable weekly repayments, which would save her a huge amount of money in interest payments.

John contacted the Cheque Centre to inform them that we would be settling the outstanding balance for Linda and arranging prompt payment to close the account.

Once it had been completed, John rang to let Linda know that she now just had one low fortnightly payment she said

“It has been an awful and worrying experience but with the help from Five Lamps my finances are a lot easier to manage”

Five Lamps has identified a general lack of education, awareness and support for people who are financially excluded.

Family tradition in socially deprived areas dictates a leaning towards doorstep lending and high interest white goods suppliers like Brighthouse.

High risk finance is seen as a way of life passed down through generations. One of our customers told us

“My Nan borrowed from the Provident, my Mam borrowed, I borrow and my kids will borrow when they turn 18. There is no other way”

When long term debt is in the forefront, our customers tend to experience a downward spiral and find it difficult to consider any way forward, be it training, volunteering or any form of employment. This leads to a general decline in their health and wellbeing.

It has been the aim of Five Lamps via their Capacity Builders programme to ensure that our customers are made aware of the options, alternatives and support available to get their lives back on track.

The ground breaking workshops are aimed at anyone who suffers from low self-esteem facing various financial challenges and unable to see a way forward. The intensive support programme encourags an invited group to review their current financial position, give them some innovative ways of saving money, reduce their outgoings and generally overcome any perceived barriers.

Capacity Builders has been well received with over 1,176 customers across the North East engaged on the programme. Many of our beneficiaries are ex-prisoners and as such require as much financial and debt management support on the ` inside` in preparation for a life on the `outside`.

This was further confirmed by Caroline Kitchen, Head of Offender Management at HMP Kirklevington Grange who identified the need for the programme and invited Five Lamps to tender for a contract to deliver the financial service in the prison.

As a consequence, a major part of the programme has involved interaction with pre-release prisoners at HMP Kirklevington Grange where we assist customer in money management, help them produce a budget; understand various financial terms and conditions which will ultimately lead to improved debt management.

Graham was approaching his release date and after attending the Capacity Builders workshop requested a follow up one-to-one meeting with a Financial Inclusion Officer to discuss what financial assistance was available from Five Lamps once he was released.

Graham was looking to purchase some gardening tools to help improve his employment prospects. He had previously worked as a Landscape Gardener and completed a number of further courses to build on his existing knowledge. He had already identified the type of work he wanted to do upon his release and his dream was to start his own business in the Gateshead area.

Following Graham’s release, he was contacted by John Hird, Five Lamps’ Senior Loans Officer who arranged to meet him and look at a positive way forward. During the meeting they discussed his aims and objectives and the range of options to help him achieve his goals.

It was agreed that once Graham had spoken to a Benefits Advisor and identified his entitlements, Five Lamps would be able to help him with a low cost loan to purchase the required tools. He has since sent his CV to several local employers and is confident of gaining employment very soon. John has also signposted Graham to the Economic Development Service at Gateshead Council, where he can gain access to free local advice on self employment.

Graham said

“The support and advice from Five Lamps has been invaluable in helping me to get my life back on the right track with a fresh start”

During the past nine months Five Lamps have engaged with over 200 prisoners via the Capacity Builders workshop with at least 50% of those requiring the all-important one-to-one service, producing a positive outcome in all cases.

HMP Kirklevington Grange are so pleased with the programme, they have entered into a new service level agreement with Five Lamps which will produce not only the financial inclusion programme but further pre-release and enterprise support activity.

Allison Emerson, from Stanley became aware of Five Lamps through a friend who had used our services and was impressed enough to gather together another 12 friends to attend a ‘Capacity Builders’ workshop being delivered in her local community centre.

Capacity Builders is a course, which aims to help and advise people who are financially excluded and have had previous problems with finance and indebtedness. We discuss a wide range of issues from budgeting, debts, APR’s, doorstep lenders, alternative forms of finance (Five Lamps personal loan and Credit Unions), utilities and how to save money. We also discuss the options and help available for people if they are looking to get back into employment or self-employment. After the workshop, our customers also have the option of a one to one meeting with a Five Lamps Loan Officer.

At the Capacity Builders workshop in Stanley, Five Lamps had also invited the Manager of the local Credit Union (Prince Bishops Credit Union) to attend to give a talk to the group about who the Credit Union are and what services are available from them. This was very productive as the majority of the attendees had not even heard of the Credit Union; however 10 of them actually signed up and became members on the day.

Five Lamps aim is that when a person has left the Capacity Builders workshop they have more confidence in being able to manage their finances and are also more aware of the options, help and advice that is available to them.

Allison was a very active participant in the workshop and was willing to discuss some of the problems she had experienced in the past, this opened up the group who then continued to talk about their own experiences.

John Hird was approached at the end of the session by Allison who wanted to discuss in more depth her outstanding debts and the problems she was having with the creditors, so a one to one follow-up meeting was arranged.

At the meeting, John asked Allison to bring all the information in relation to her finances and they agreed a plan that would help resolve the situation for her. This started with an in-depth income and expenditure review so that John could assess her ability to make offers to repay her creditors and resolve the issue of letters arriving daily from creditors and numerous telephone calls chasing her for money. This was having an adverse effect on Allison who did not know who to turn to for any help on dealing with this stressful situation.

John has since written to 7 creditors in total to offer and arrange a realistic repayment plan. Allison said ‘I want to resolve my past problems and make a fresh start with my finances’.

Allison is starting to turn things around by facing up to her past problems and feels she is moving forward by dealing with them. She has now joined Prince Bishops Credit Union and is trying to save for the first time and is also looking to get back into work after being unemployed for 5 years. She has been working as a volunteer in her local youth centre and also the charity shop in the town centre and enjoys being a part of the community.

Allison said

“I can’t thank Five Lamps and John enough for the help and support they have given me. I really enjoyed the Capacity Builders course – it was great to talk about my problems with other people who are going through the same thing. I am trying to save with the Credit Union so I don’t fall back into debt”.

Capacity Builders is funded by One North East Third Sector Capacity Fund, administered on their behalf by Rocket Science.

Andrew Clenahan, 48, from Thornaby was recommended by a friend in July 2011 to contact Five Lamps for advice on where he stood in regards to his entitlements whilst being unable to work

Andrew is currently employed by Morrisons and due to health issues, including diabetes and mobility is unable to return to work. Steven Redpath, Five Lamps’ Financial Inclusion Link Worker met with Andrew to assess his options and identified that Andrew was eligible for Disability Living Allowance.

Steven supported Andrew to complete an application pack and they submitted it August 2011 with all of the relevant medical information required. Andrew was initially turned down, so Steven requested an appeal at Andrew’s request. They both put together further medical evidence and were granted a telephone appeal.

Once again the application was declined. Steven used his experience with welfare benefits to stress that he felt a strong injustice had occurred and stated that the assessors needed to see Andrews condition. He was suffering with heavy swelling and ulcerations on his feet and was under the high risk foot clinic at North Tees Hospital. The infection has spread to both feet and there is a possibility of amputation. This has severely restricted Andrew’s mobility and quality of life. Steven felt that at the very least a low level award should be made.

Steven and Andrew continued to challenge the decisions, gathering further evidence as Andrew continued to attend medical appointments, as well as a lengthy stay in hospital.

After seven months of challenging decisions supported by medical evidence, Steven was delighted to learn in January 2012 that Andrew would receive a Disability Living Allowance award at the highest rate of care, due to Andrew being unable to dress, bathe and prepare a cooked meal without full support and the high rate mobility component, which would also be fully backdated to the date of application.

Andrew said

“I am very thankful to Five Lamps, Steven was very professional. I highly recommend them to anyone. They have given me my life back!”

Steven said

“It is really rewarding to have been able to help Andrew. It has been a seven month struggle, but it was worth it in the end. Andrew now receives an extra £125 a week in benefits that he is entitled to claim”

Philip from Northumberland approached Five Lamps in October 2011 to applying for a personal loan, as he needed to use the loan to pay for a rental property administration fee.

Philip had previously led a chaotic lifestyle due to substance issues for the last 6 years, sleeping on settees at friend’s houses on temporary bases, with no fixed accommodation. Turning his life around with support from John Snowdon of the North East Council on Addictions, Northumberland Drug Intervention Programme he began looking for accommodation.

Unfortunately, the rental properties offered were in very poor condition or out of his budget, and so he contacted Five Lamps.

Having been introduced to a reputable landlord, Five Lamps liaised on Philip’s behalf in attaining a quality rental property without an upfront bond payment. Philip then met Vince Rogers, Five Lamps Loan Officer in Northumberland to complete the necessary paperwork to sign up for his loan.

Philip moved into his new property over 6 weeks ago, assisted by an affordable loan with payments based around his benefit income.

Philip said

‘I was very pleased & impressed with the whole process – Five Lamps made it easy for me, and I now have my independence after years of uncertainty’.

Kathleen Dawson from Stanley, Durham is an existing Five Lamps Financial Inclusion customer who was having additional financial problems and struggling to meet payments on 2 catalogue accounts she held with a creditor.

She was struggling to meet the monthly payments and had done the right thing by talking to her creditors to explain her situation. Unfortunately they would not listen to her and had refused to reduce her monthly payments.

Kathleen had also contacted a Debt Management company, who said they would deal with this matter on her behalf and they had given her details of what the reduced payments would be. She was not happy with the figures being quoted or the service being offered, so contacted John Hird, Five Lamps’ Senior Loans Officer for help.

Kathleen came along with her sister who had an appointment with Five Lamps and spoke to John about her problems. John carried out an in-depth income and expenditure with Kathleen and then wrote to her creditors to make an affordable and reasonable offer, which was in effect a 50% reduction on her existing payments.

Kathleen’s creditors were happy to accept this offer and Kathleen was happy and relieved when John rang to tell her the news.

She said

“Thank you John and Five Lamps for all your help and dealing with this matter on my behalf, it is such a relief that the matter has now been sorted out. John’s hard work has cut my debts in half”

Five Lamps have been helping people to manage their money through a ‘Capacity Builders’ course, which helps people to make a budget, understand what financial terms mean and also to cope better with their debt.

In February 2011 at one of our courses held in Bishop Auckland, Margaret approached Paul Burton, Five Lamps’ Financial Inclusion Team Leader.

Margaret confided in Paul that she had serious financial issues and confessed that this had led to her attempting suicide in the past due to the severe stress that she was under.

Paul arranged for John McCoy, Five Lamps’ Loan Officer to meet with Margaret and complete a full financial review. From this meeting it became apparent that Margaret had borrowed some money from her nephew to pay off some of her debts to Provident and Greenwoods as her husband had lost his job.

Margaret explained to John that she needed to pay back the money borrowed from her nephew as there was a funeral in the family.

Margaret said

“I was on the verge of a nervous breakdown. I felt like I couldn’t discuss the debts with my husband. I felt like I had no choice but to turn to an illegal door street lender”.

Following our review, Five Lamps supported Margaret with a personal loan that enabled her to pay back the money she had borrowed from her nephew. We also wrote to Provident and Greenwoods to ask them to reduce the weekly amounts that Margaret was paying. They both agreed, leaving Margaret with more money to manage her bills.

Margaret said

“I can’t thank Five Lamps enough for their help. I feel that I can now get on with my life without the worries I have been carrying for the past 6 months”