CM October 2023

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CMNEWS A round-up of news stories from the world of consumer and commercial credit. Midlands constituencies most under pressure as cost-of-living bites THE Midlands is the region of the UK hit hardest by the rising cost-of-living, with the cities of Birmingham, Leicester and Coventry all being found to be financially worse off in 2023 than the year before. Data from the latest Financial Vulnerability Index (FVI) conducted by Lowell shows 41 percent of all areas that became financially worse off this year are in the Midlands. While the South continues to be better off than the UK average, and the North sees improvements in its FVI Score, the Midlands finds itself squeezed with many of the worst-performing areas in the latest FVI Index. In terms of specifics, financial health in the West Midlands is now 12 percent worse than the UK average, while the East Midlands is just over five percent Written by – Sean Feast FCICM Financial worry taking its toll on mental health of young people THE burden of financial worry is having a significant impact on the mental wellbeing of millions across the UK, particularly young adults. New research from responsible lender, Creditspring, suggests that almost a third (30 percent) of Brits say their mental health has significantly worsened since the start of the costof-living crisis, rising to almost half (48 percent) among 25-34-year olds. The research shows that financial woes are directly contributing to this widespread decline in mental health, with approaching a quarter (23 percent) saying that this is the worst their mental health has ever been because of money worries, increasing to more than a third (36 percent) among 25-34 -year olds. The research comes as recent data from the Office for National Statistics shows that people aged between 25 and 34 are more than three times as likely to experience financial vulnerability compared with those aged 75 years and over. There is a clear need for increased financial support and mental health resources to address this growing crisis – particularly for younger generations. Indeed, 23 percent of people aged between 25 and 34 have already sought mental health support as a result of their financial situation, and one in five in this age group have used a debt advice charity in the past 12 months. The data also points to the perceived inadequacy of Government support, with nearly three in ten (29 percent) people across the UK saying they’ve had to seek help elsewhere because there’s worse off, having been more financially healthy than the UK average in 2017. The 10 Midland’s constituencies – covering 700,000 people – accounts for over a third of the UK’s financially vulnerable constituencies; data shows that these constituencies have high numbers of full-time workers and families with children. Analysis indicates that ordinary working families are bearing the burden of the high cost-of-living. In areas with higher levels of social housing and benefits usage, the improvements in financial health have been much more significant suggesting that Government support may be outstripping pay in its effect on financial health. Lowell’s UK CEO John Pears says that households in the Midlands are struggling the most as they borrow to not been enough financial support from the Government. This rises to around four in ten among 25-34-year olds. Access to the right support will be critical to turning the tide on this crisis. Nearly half of young people say their mental health cannot improve as long as they are in debt, and a similar number say they feel stuck and that there is nothing they can do to improve their financial situation. Despite this, only 10 percent of people say that their bank has contacted them about mental health support, and more than half (57 percent) say that they’ve heard nothing from their bank on this topic. Better financial education has an important role to play in empowering people with the knowledge needed to take control of their finances, and it is important that people receive this early on in their financial lives. meet the inflated costs of everyday spending: “It’s a reverse in fortunes from a few years ago as the gap with the rest of the UK widens,” he explains. “The Midlands is sadly not participating in the cautious recovery the rest of the UK is experiencing. With the recent news of Birmingham City Council’s declaration of bankruptcy there are likely to be further challenges for those most financially vulnerable who rely on critical services from the Council.” The FVI is an innovative tool to measure and track financial resilience, nationally and locally, across the UK. Created by Lowell and the Urban Institute, and provided by Opinium, the index is described as bringing together publicly available measures and Lowell’s proprietary data to give a clear picture of financial vulnerability in the UK. Brave | Curious | Resilient / www.cicm.com / October 2023 / PAGE 6
ALDERMORE has provided a property loan to Polyglobal for the acquisition of another trading business, B.V.A. Tools & Plastics, a tool manufacturer that is also based in Wakefield and is a specialist in the plastics injection moulding industry. The acquisition took place earlier this year and will allow Polyglobal to enhance NEWS ROUNDUP Plastic fantastic There is an appetite for this among the youngest respondents, with two in five (42 percent) 18-24 year olds agreeing that they need financial education to help them make better decisions. Neil Kadagathur, CEO and Co-Founder of Creditspring, believes the findings are enormously concerning: “The fact that so few people have been contacted by their bank about mental health support only serves to highlight the disconnect between financial health and mental wellbeing,” he says. “There is a significant opportunity here to create more integrated, joined up support networks for consumers, and it is imperative that we work together to address this issue head-on by providing comprehensive support systems that merge financial support with mental health resources. “Moving forward, we want to see policymakers, financial institutions, health services, and charities come together in partnership to develop more integrated solutions that address this intersection of mental health and financial distress. In doing so, we will collectively work towards a future where peoples’ mental wellbeing is no longer dictated by the state of their finances.” manufacturing processes, whilst reducing costs and crucially allows expansion into new markets and targeted customers. Polyglobal is a longstanding Aldermore customer and has been with the bank since 2015. Aldermore has backed their growth plans using its specialist finance teams and products. Scammers target younger groups UNDER 25s are more likely than older age groups to have been targeted in an impersonation scam and also be swayed to provide personal or financial information, according to new research by UK Finance’s Take Five to Stop Fraud campaign. An impersonation scam is where a criminal contacts you pretending to be a person or organisation you trust. These scams can be very sophisticated and often start with attempts to trick you into disclosing personal and financial information. Criminals then use this information to impersonate someone you trust, making it seem genuine, but their ultimate aim is to try to steal your money. Worryingly, almost half (49 percent) of 18-24-year olds surveyed said that they had been contacted by an impersonation scammer. This compares to only a third of those aged over 55 (33 percent) who had been contacted. Of the 18-24-year olds targeted, over half (52 percent) said they actually shared personal information or made a payment as a result of the request. Young adults aged 18-24 were the most confident of any age group in their ability to identify a scam with 91 percent saying they were confident that they would be able to spot a fake request for personal information online. This level of confidence could put them at risk, as just over a quarter (27 percent) said they will always take steps to check if the organisation or person can be trusted when asked for personal information out of the blue. This is in stark comparison to older age groups, with over 60 per cent of those aged over 55 saying they always take steps to check out unexpected requests. UK Finance figures show over £1.2 billion was stolen through fraud in 2022. There were 45,367 cases of impersonation scams in 2022 costing at total of £177.6m, UK Finance figures show. >NEWS IN BRIEF Keeping in Cynergy CYNERGY Bank has secured a £20 million Tier 2 capital facility from British Business Investments, a wholly-owned commercial subsidiary of the British Business Bank. The capital will be deployed across Cynergy Bank and Cynergy Business Finance. The new funding will enable the challenger bank to accelerate the delivery of its current business strategy to be the UK’s premier ‘human digital’ bank and market leader in the SME lending space. The Tier 2 Capital facility is also said to support Cynergy Bank’s growth plans, which includes delivering over £250m of new-to-bank lending across the SME and property sectors. We’re all doomed. SAVEMONEYCUTCARBON, a sustainability consultant, claims levels of profound concern about the state of our planet’s climate are rising to the point where people are unable to perform at work. While it is not yet a medically diagnosable condition, the growing prevalence of ‘eco-anxiety’ can be seen to impact all aspects of life, affecting all age groups. Force of Nature, a youth nonprofit organisation found that more than 70 percent of young people feel hopeless due to the climate crisis and 56 percent believe humanity is doomed, while only 26 percent feel that they know how to contribute to solving the problem. Picture perfect A new £243,000 asset finance loan from Allica Bank, brokered by media industry finance specialist Medialease, is helping award-winning camera rental company VMI TV to access and maintain the very latest highend equipment to meet evolving customer demand. Founded in 1979, VMI supplies high-end production for the likes of the BBC, ITV, Sky, Universal Pictures and Netflix. The deal was agreed in part thanks to the Government’s Recovery Loan Scheme (RLS) that offers a 70 percent recovery guarantee to the lender, helping them to share the risk. Brave | Curious | Resilient / www.cicm.com / October 2023 / PAGE 7
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Page 3 and 4: SEAN FEAST FCICM MANAGING EDITOR Ed
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Page 11 and 12: OPINION Name check Customer service
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CM October 2023

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