Financial capability in pregnancy

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In Scotland one in five children live in poverty, poverty impacts on outcomes for children including:

  • lower educational outcomes: On average, children living in poverty score less well on a range of educational measures such as reading tests and examinations.
  • lower health outcomes: Poverty is associated with a higher risk of both illness and premature death. Three-year-olds in households with incomes below about £10,000 are 2.5 times more likely to suffer chronic illness than children in households with incomes above £52,000.
  • reduced social participation: Poverty isolates people, and reduces their ability to engage in social and community life. Studies have compared the poorest and richest fifth of households. They showed that poorer children had fewer opportunities for activities and entertaining friends.

All professionals working with children and families have an opportunity to reduce the impact of poverty on families though identifying those who are at risk of financial crisis due to circumstances, behaviours or life events and highlighting opportunities to develop financial capability.

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Equally Well

Equally Well, a report of the Ministerial Task Force on Health Inequalities, recommends that:

'Universal public services should build on examples of effective financial inclusion activity, to engage people at risk of poverty with the financial advice and services they need.'






The subsequent Equally Well Review reitirates:

'The need to prioritise and sustain public services which directly support the most vulnerable people, both to maximise their income and to enter or maintain employment where appropriate.'







Community Planning Partners are expected to harness opportunities to embed financial inclusion opportunities into existing pathways and referrals for individuals, for example, through maternity and early years, housing and employability services. 

Financial capability is the early intervention for financial inclusion, tackling one of the causes of poverty and deprivation rather than struggling to deal with the symptoms.  It plays an important role in achieving wider financial inclusion, alongside income maximisation, debt advice and measures to ensure access to affordable credit.

Key transition points are a good time to engage with people to provide support to enable better financial decision making and build skills for the future.  Having a baby is a key transition point when parents need to change the way they manage their money to cope with new expenses and also have the incentive to change because of their new responsibilities.  

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The benefits of improved financial capability

The aim of financial capability work is to develop the ability and confidence of individuals so that they have the motivation and skills to manage their finances, can engage confidently with banks and other providers of financial services and make better informed decisions about products such as insurance and loans. Low income families, single parents and women are among the groups most likely to be at particular risk from the consequences of poor financial decision making. 

Improved financial capability can:

  • help those living in poverty to achieve more on a low income
  • contribute to the confidence needed to find a route out of poverty, for example through employment 
  • contribute to sustaining employment, making it easier to make the transition from benefits to earned income and making individuals more attractive to employers, for example through fewer working days being lost to stress 
  • contribute to improved self esteem and a greater feeling of control among mothers and fathers which, in turn they may pass on to their children, helping break the poverty cycle.  

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Case study

Healthier Wealthier Children (HWC) is a project funded across NHSGG&C by the Scottish Government. The project aims to assist families, parents and carer’s struggling with money worries and who may be at risk of child poverty. Parents and carer’s can be referred to the project by Midwives, Health Visitors and other health staff offering services to young children. Referral criteria for support is as follows:

  • Pregnant women
  • Parents or carers of children under 5
  • Parents or carers of children under 19 with additional support needs eg; disability or long term illness

The following is an example of how the project has been able to assist a family struggling with money worries in difficult circumstances.

A young couple with 3 children, the youngest 2 are under 5 and each has a disability. Dad works full time in fairly low paid employment with mum at home full time caring for the children. The couple are owner occupiers. Mum finds it very difficult to go out with the children as she is unable to use public transport and taxis are too expensive. Due to the children’s mobility difficulties, Mum and the children spend most of their time at home which means heating the home for most of the day and night. Due to the children’s disabilities mum has to do lots of laundry. These factors are having a big impact on the family’s energy bills. Debt has been accrued with Brighthouse, a high street weekly payment household goods store, totalling £6000 for a suite and a tv. Weekly payments to Brighthouse are £33 with 2 payments remaining on the suite.

The family Health Visitor suggested a referral to HWC following a diagnosis of significant disability of youngest child. Mum commented she did not think that a child of 2 and half years would be entitled to DLA but was happy for the referrals to be made.

Following referral to HWC the Income Maximiser assisted the family in applying for additional benefits. The family were awarded Middle Rate Disability Living Allowance (DLA) and disabled child element of tax credits. This amounted to an additional £47.80 and £52.21 extra per week respectively. Mum stated that the extra money will help with taxi costs, she can now afford hackney style taxis to get out and about to hospital appointments; this had been a problem in the past with the larger style pram. Mum can also afford taxis to go to clubs and support groups in her area. The extra money will also go towards utilities bills and mum will not have to worry as much about times when she has to heat the house for days at a time, i.e. winter 10/11 was a very worrying time. A benefit check also revealed that the couple were entitled to Council Tax Benefit, they assumed they wouldn’t be as they were owner occupiers, this saved the family £943.44 per year.

The couple were also supported to apply for a mentored loan of £500 from their local credit union and Money Matters, the income maximiser also negotiated the return of the tv to Brighthouse. A tv was purchased from a local supermarket for under £500 with repayments on the mentored loan £12 per week, £2 of which is savings with the credit union.

Engagement with the service has clearly brought about significant improvement for this couple and while this may not be the case for everyone it highlights the potential contribution Health Visitors and other key health staff groups can make to reducing child poverty. 

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Helping parents to increase financial capability

Parents can be signposted to the Parents Guide to Money on the Money Advice Service website this site has up to date information on financial services and tools such as a budget and debt calculator to support budgeting with a family.  The Parents Guide to Money is also available in hard copy. 

From 1 April 2011, Citizens Advice Scotland is providing a face to face financial capability service in Scotland on behalf of the Money Advice Service.  The service offers free and impartial information and guidance on the money matters such as budgeting, tax and welfare benefits, borrowing and saving.  It is also available on the phone and online.

Evidence from the Money Advice Service

A further investigation of the Relationship between Financial Capability and Psychological Well-being in Mothers (2008) with young children found a clear association between financial capability and a mothers' psychological wellbeing, even when adjusted for demographic and area characteristics.

The long-term impacts of financial capability: Evidence from the BHPS (2011)

'Improving people’s current financial management skills – and in particular relating to their ability to make ends meet – will not only have immediate effects on, for example, their psychological wellbeing, but also have longer lasting effects on their mental health, living standards, savings behaviour and household income. Therefore the benefits of programmes that promote financial capability may reach beyond the more immediate into the medium to long-term.'











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