An emerging trend in the UK today is that an increasing number of people need help with their finances, particularly when faced with unexpected financial challenges. Mainstream lenders increasingly ignore people when they need help the most. On a day-to-day basis, people are struggling and as a result are turning to high cost alternatives.

Last year, nearly 600,000 people with problem debt contacted the debt charity StepChange. Debt owed on catalogues and home credit is rising, with the second highest level of demand for debt advice coming from Yorkshire.

One in 20 families rely on payday loans and although new rules have been imposed on payday loan companies, it is still a very high cost option and a huge problem for those that use it. Additionally, an estimated 350,000 low-income households rely on rent to own schemes for furniture and white goods, sometime paying three or four times more than typical high street costs.

Sheffield City Council together with other city leaders has identified a need for affordable finance in their city, as they found that the following is happening in Sheffield each year:

·         Around 34,000 people taking, on average, two payday loans of £250 for 30 days.

·         Around 20,000 doorstep borrowers borrowing, on average, £650.

·         Around 20,000 people taking two loans through pawning on average of £250, each for two months.

·         Around 3000 people borrowing, on average, £600 for two years through a weekly payment stores.

In August this year Sheffield has been host to a pioneering new venture aiming to address this growing problem; a city centre based non-profit organisation set up specifically to tackle unfair access to finance.

Sheffield Money has been set up for the benefit of Sheffield residents by Sheffield people, who are being let down by mainstream finance. We offer loans, savings accounts, current accounts, lower cost white goods and appliances, as well as money and debt advice all under the Sheffield Money brand.

The organisation operates in a broker model for existing suppliers with shared objectives (e.g. Credit Unions, CDFIs and the advice services). An essential objective of the service is to encourage financial inclusion and awareness.

By offering alternatives to non-standard credit loans, we hope to improve and reduce debt crisis cycles, as well as help customers to start regularly saving in order to create a financial buffer for the future. We also have a money adviser in branch to help people with ‘all things finance’ - such as budgeting, savings, benefit eligibility, or improving credit scores to ease access to credit in the future.

It is written into our mission statement that we will never recommend a loan to someone who cannot afford it, but we will always try to offer an alternative if possible, for example signposting using our strong links with local advice services.

Set up as an Industrial Provident Society with a non-executive board chaired by The Very Reverend Peter Bradley, The Dean of Sheffield Cathedral, Sheffield Money opened its doors at the beginning of August, and has already received a great deal of positive attention from local organisations hailing this much needed alternative to high cost lenders. With over 4500 hits on their website, and almost 500 applications for loans, it’s clear that there is demand for the service. These enquiries and applications have come from all over the Sheffield City Region and we hope to be able to expand our unique and innovative model to other cities in the near future.

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Get in touch to see how they can help you: 0114 399 5555