I am writing this post as I have always said knowledge is power. If we have no awareness of our current financial position in the U.K we will do nothing to alter the current situation for our community and the next generation, so I am sharing some data about our financial position.
There is clear evidence that those who are financially literate are more likely to plan and save for retirement, have savings, and manage their debt more effectively; they are also less likely to be financially fragile. If you’re financially literate and smart with your money, you have a huge advantage in life, right from the beginning.
In 2022 OVER 80% of black African and Caribbean people have less than £1,500 in the bank – and a quarter has no savings at all – according to new government figures.
Black children are also now more than twice as likely to be growing up poor as white children, according to the Labour Party research. There is a knowledge gap among some children of today, some have access to information from parents, or schools while others do not. Financial literacy is important, as money is a part of everyone’s life. When a child gets older, they are going to have to pay for food, housing, and transportation. If we are not teaching them the basics now whilst they are at home how are they going to cope in the real world?
What is even more concerning is that we are the least likely to seek help and advice when in debt I have been requesting data from StepChange the UK’s leading debt charity and they help over 600,000 people every year to deal with debt problems by providing free debt advice and practical support.
When I eventually received the data detailing who is receiving support and advice it transpired that only 4% of our community is seeking help and assistance from the organization this is shocking considering we are more likely to be impacted by the financial crisis.
See below:
Research enquiries from Stepchange
| August – December 2022 | |||
| All clients: UK | Clients: England and Wales | General population: England and Wales Average3 | |
| White | 86% | 85% | 84% |
| English, Welsh, Scottish, Northern Irish or British | 82% | 81% | 76% |
| Irish | 1% | <1% | 1% |
| Gypsy or Irish Traveller | <1% | <1% | <1% |
| Any other White background | 4% | 4% | 7% |
| Mixed or Multiple ethnic groups | 4% | 5% | 2% |
| White and Black Caribbean | 2% | 2% | 1% |
| White and Black African | 1% | 1% | <1% |
| White and Asian | 1% | 1% | <1% |
| Any other Mixed or Multiple ethnic background | 1% | 1% | 1% |
| Black, African, Caribbean or Black British* | 4% | 5% | 4% |
| African | 2% | 2% | 2% |
| Caribbean | 1% | 1% | 1% |
| Any other Black, African or Caribbean background | 1% | 1% | <1% |
| Asian or Asian British** | 4% | 4% | 9% |
| Pakistani | 1% | 2% | 2% |
| Indian | 1% | 1% | 3% |
| Bangladeshi | 1% | 1% | 1% |
| Chinese | <1% | <1% | 1% |
| Any other Asian background | 1% | 1% | 2% |
| Other ethnic groups | 1% | 1% | 2% |
| Arab | <1% | <1% | <1% |
| Any other ethnic group | 1% | 1% | 2% |
| * England and Wales Average includes ‘Black Welsh’ | |||
| ** England and Wales Average includes ‘Asian Welsh’ | |||
| 3 ONS Census 2021 dataset on ethnic group by age and sex in England and Wales, filtered on those aged 18 and over | |||
I asked Stepchange in light of the above data what they intended to do to address this issue they responded as follows:
‘It is certainly something we’re keen to look at. Whilst some groups are in line with the national demographic breakdowns, it is clear that certain ethnicities are under-represented among our client base.
We’re looking at this in a few different ways. Firstly, we’ve partnered with organisations like Fair4All Finance to look at the financial inclusion of people from Black, Asian and minority ethnic communities. The research will look at how ethnicity influences access to financial products and services in the UK. It’s a long-term project which has been ongoing for a little while now, but we’re hoping for some findings shortly: https://fair4allfinance.org.uk/new-research-into-how-to-increase-the-financial-inclusion-of-people-from-black-asian-and-minority-ethnic-communities/
Secondly, in terms of how we position ourselves with our marketing. We have recently conducted some significant research on our target markets and brand development, which should allow us to better reach out to communities across the United Kingdom.
And finally, last year we launched our first-ever equality, diversity and inclusion strategy that aims to improve the diversity of our staff and focuses on enabling us to become a more inclusive organization. The plans and commitments in the strategy can be found here: https://www.stepchange.org/about-us/equality-diversity-inclusion.aspx’
It is most surprising to me that in 2022 they were launched their first-ever diversity and inclusion strategy whilst this is welcomed is concerning that it is the first-ever strategy.
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Below is data and information that we need to be aware of. Please read and share with others especially the next generation to break the cycle.
Black households are disproportionately impacted by the cost-of-living crisis, according to almost every analysis I have seen recent data shows that nearly four in five have less than £1,500 in savings and a quarter has no savings at all compared to an average of 15 per cent across all ethnic groups in the UK..
More than half a million Black adults have no savings at all to fall back on, according to figures compiled by the Labour Party, which attacked the government’s “failure to tackle deep-seated structural inequalities”.
The analysis, published to mark Race Equality Week in Feb 2022, shows that more than 1.2 million (78 per cent) adults from households headed by someone from a Black, African, Caribbean or Black British background reported having less than £1,500 in savings and investments, compared to a national average of 48 per cent.
According to a recent report by the Runnymede Trust, Black African and Bangladeshi households have only 10p of savings and assets for every £1 of white British wealth
Even more startling is the fact that over half of Black women in the United Kingdom have no retirement savings, according to a shocking new report.
Research from Scottish Widows’ latest Women and Retirement Report shows that Black women are most likely to face pension poverty in the UK.
According to the report, 54% of Black women don’t have anything saved in preparation for retirement, this is followed by 40% of South Asian women and 35% of White women.
Over two-thirds 68% of Black women are concerned that they will run out of money during their retirement years, this compares to 58% of White women.
Money and Mental Health
Research shows that individuals from minoritized ethnic groups are disproportionately affected by the economic and social determinants that contribute to poor mental health. Factors such as racism, social exclusion and low income were identified as significant contributors to mental health disparities between ethnic groups.
people from minoritized ethnic groups with mental health problems can also encounter barriers to good financial resilience. Systemic discrimination in the workplace, lower average incomes and higher levels of problem debt were identified in the research as significant challenges faced by many.
Fair4All Finance is partnering with Esmée Fairbairn Foundation, NatWest Group and StepChange on new research into how ethnicity influences access to financial products and services in the UK.
The research has disclosed the following inequalities:
- Fraud victims from minority ethnic groups are more than twice as likely not to get their money returned compared to White fraud victims
- 60% of Asian and 63% of Black households have no savings, compared to 33% of White households
- Black African, Black Caribbean and Bangladeshi groups are 4x, 3.5x and 2.5x more likely to be denied a loan respectively compared to White groups
The partnership aims to show how financial services providers can be more inclusive of people from Black, Asian and minority ethnic backgrounds.
The group will use the insights to enable the development of well-designed and effective solutions. Ones that increase the financial inclusion of these communities.
Regulators, policymakers and people working in financial services will also be able to use the findings to inform their decisions on how to improve outcomes for Black, Asian and minority ethnic communities.
Joint funding from Esmée Fairbairn Foundation, Fair4All Finance and NatWest Group is in place. Fair4All Finance is now looking for a provider to conduct the research.
I started this post with the words that ‘We must do better’ and if we are not educating our children the next generation what will the future hold for the majority of our community? It is now 2024 and we are still living in a world we still have a long way to go to financially empower our community.
Change starts with us in the first instance, let us all take a moment and look at what action you can take to correct the imbalance. It could be as simple as teaching your child from a very young age the benefits of saving. Ensuring that you have financial protection i.e life cover to protect our children and to increase generational wealth.
So, the challenge for 2024 is What will you do to increase financial stability for the next generation??
Sources: Labour Party, Scottish Widows, Money and Mental health, Stepchange