It was worrying to see Shelter figures out today, reported on the BBC revealing almost 4million families are one month away from homelessness because they only have enough money to pay their rent or mortgage for one month.
Shelter surveyed 7,500 people and the results showed high housing costs and wages at a standpoint meant many are living on a financial knife-edge.
On top of this, 44 per cent of working families with children under the age of 18 could be just one paycheque away from losing their home if they became unemployed. This is because they simply have little or no savings to fall back on – no safety net to catch them should this happen.
Liz Clare, a helpline adviser at Shelter, said sudden job loss or illness could “tip any of us into a spiral that puts the family home at risk”, and that “most of us simply don’t have enough money in the bank that we can rely on for long enough to get us back on our feet.”
As is clear from these results, all it takes is a bit of bad luck and losing your home becomes a reality. Nobody can be 100 per cent sure that their job is safe, or that they will not lose their income through sudden illness.
What we need is a system in place ensuring people are protected when this happens – borrowers should never be in a situation where they feel they can’t take the necessary precautions when it comes to having that safety net.
CUNA Mutual is working with lenders across the industry to develop some of these safety nets. Most recently pioneered with Credit Unions, waiver is a simple arrangement written into the loan agreement, at no extra cost, so that if the person is unable to work or loses their income, they simply contact the lender and payments are waived for up to 18 months. CUNA Mutual provide the waiver package, each programme is unique to the particular lender based on their data.
CUNA Mutual bring specific insight and experience to understanding a customer’s needs and provide the insurance for the lender, covering illness and unemployment, the main reasons for people unable to make their repayments. With waiver, no arrears are built up, no credit scores are affected and throughout the process the loan amount continues to decrease while the person is off work.
Credit unions across the UK are already live with waiver and the programme continues to expand and the first claims are starting to come through – these borrowers are protected, let’s ensure others are too.