1. Context
2. The study
3. Key findings
4. Points to consider

Context

A previous study for National Youth Advocacy Service (NYAS Cymru) explored young care leavers’ experience of financial support in Wales and found evidence of barriers to financial inclusion including difficulties getting identification documents, debt problems and difficulties accessing appropriate financial information. As a result, Consumer Focus Wales commissioned this research to gain a better understanding of financial exclusion among young care leavers in Wales to help develop appropriate solutions to tackle the issue.

The term ‘looked after children’ is used in the Children Act 1989 to describe young people who have spent periods of their life in the care of local authorities, with around 5,000 children looked after in Wales, the majority of whom (77 per cent) are living with approved foster parents.

Under the Children (Leaving Care) Act 2000, local authorities have a duty to support young people to live independently, including the provision of financial and practical help. The Welsh Assembly Government’s Child Poverty Strategy and Delivery Plan for Wales (February 2011) also recognises the need to improve provisions for looked after children and care leavers.

The study

• The study was undertaken by Shelter Cymru for Consumer Focus Wales and was designed as an inclusive participatory research project to involve young people at every stage of the process. This included the use of peer researchers, the establishment of a peer steering group and a ‘virtual’ advisory group of representatives from key organisations with an active interest in the issues affecting vulnerable young people.
• The evidence gathering included three key elements:
• One-to-one interviews and discussions with 46 young people aged 16-25 in eight local authorities in Wales plus three focus groups involving 12 young care leavers from four local authorities in Wales - Self-completion questionnaires from 36 stakeholders across Wales who work with looked after children or care leavers - 10 in-depth interviews with stakeholders across Wales who work with looked after children or care leavers.
• The study also includes a literature review which identifies a number of studies about the exclusion faced by young people leaving care.

Key findings

• The majority of care leavers who took part in the research were experiencing financial exclusion – both in terms of financial-management capabilities and access to appropriate financial products and services to meet their needs.
• The impact of this financial exclusion was wide-ranging from limiting opportunities to progress on to further education or training and not being able to socialise with their friends, to severe consequences such as struggling to afford food or decent clothing, homelessness and mental health difficulties.
• In many situations, young care leavers self-exclude from accessing financial products or services however, there was also evidence of structural reasons leading to enforced exclusion among care leavers (such as difficulty obtaining identity documents). Many young people who have left care are turning to high cost credit in order to meet the cost of living.
• A combination of factors often associated with young care leavers may make them particularly vulnerable to disadvantage and financial exclusion. These include reduced chances to gain well-paid employment, with an increased likelihood of living on a low income; reduced chances to learn money management skills, and the fact they often have to live independently, with little or no family support, well before many other young people.
• Opportunities young people in care have to develop their financial competence need to be improved. There is evidence of good practice, but in many cases the effectiveness of financial information provision by local authorities appears limited and inconsistent.
• The findings confirm the importance of providing clear, well-structured financial education to young people in care before they make the transition to independent living. The report makes a number of recommendations to address these issues.

Points to consider

• • Significant attention is given to methodology including ethical considerations with an appendix detailing the approach.
  • The authors state that the research may underestimate the extent of financial exclusion among care leavers for two reasons: i) young people may not wish to be stigmatised as being ‘excluded’ and play down the fact that they are struggling financially and ii) the sample contained young people who were in contact with leaving care teams and support services, therefore their situation may be different to those who are not accessing services and have ‘slipped through the net’.
• • It is likely that the findings in general can be transferred to young carers in other parts of the UK within the constraints of the methodology outlined above.
• • The report includes a series of recommendations directed at government (at both a local and national level), the financial services industry and other agencies working with children and young people in care/care leavers to address the issues highlighted.

Full report

From care to where - full report