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21 February 2013

Moneyline Merthyr Tydfil opens as CWC call for increased financial capability and debt prevention

Not-for-profit social enterprise to be opened by Huw Lewis, AM to cull high interest lender and loan shark use

Huw Lewis AM will officially open Moneyline Merthyr Tydfil today, a not-for-profit social enterprise, providing affordable loans and free money advice to people who are usually ignored by mainstream lenders. Set up and part funded by housing associations, Moneyline Merthyr Tydfil is the sixth branch to open in Wales and will provide a real alternative to high interest money lenders and loan sharks.

Moneyline Merthyr Tydfil is opening as hurricane housing benefit approaches. The so called ‘Bedroom Tax’ will be introduced in April with 40,000 people in Wales expected to be affected, losing part of their housing benefit if they have a ‘spare’ room.

Other reforms such as changes to Disability Living allowance (DLA) will also be introduced from April, with the Welsh Government estimating that around 42,500 people in Wales will lose an average of up to £83 per week.

The impact of these cuts along with the lack of appropriate financial products is also highlight in a report launched today by Cuts Watch Cymru, ‘Mitigating the impact of changes to Housing Benefit in Wales’. One of their recommendations calls on Welsh Government, social landlords and local authorities to take action to increase financial capability and debt prevention.

Housing associations and organisations such as local credit unions and other key partners are working hard to address this issue and to provide alternatives for people living in the areas in which they operate.

To date Welsh Moneyline branches have issued over 13,000 loans valuing over £6m. Customers are encouraged to open a savings account, with nearly a third (customers who people say can’t and won’t save) opting to do so - collectively saving a total of £900k.

In addition free independent advice is offered to all customers – regardless if they have been offered a loan or not. This money advice project is run by Community Housing Cymru’s (CHC’s) money advisors who have been funded by the Big Lottery and Dwr Cymru.

To date CHC’s money advice project has advised nearly 2,000 customers, identified over £340k of unclaimed benefits and has helped customers reduce their water arrears by over £500k via the Dwr Cymru customer assistance fund. They have also given over £86k of budgeting tips to customers to help reduce their outgoings.

Nick Bennett, Group Chief Executive of Community Housing Cymru, the membership body for housing associations in Wales said: “Affordable credit options and good timely advice will be key to helping tenants through these changes. In addition to providing affordable loans and opening saving accounts, Moneyline staff assist customers to open basic bank accounts with direct debit provision while discussing priority bill payments with them – all of which will help when Universal Credit and direct payments to tenants is introduced in October.”

Nigel Draper, Chair of Moneylin­­e Cymru added: “We know tenants are going to face very difficult decisions over the coming months as welfare changes are introduced. With less money in their pocket, a rise in the cost of living, and universal credit which will be paid monthly in arrears - we believe initiatives such as Moneyline Merthyr Tydfil can provide real alternative to ensure people don’t get bitten by high interest lenders or loansharks.”

Moneyline Merthry Tydfil and the CHC money advice project are both supporting and promoting the ‘Your Benefits are Changing campaign’ to raise awareness of the changes to welfare reform and to encourage people to seek advice about their own situations. If you would like to speak to an advisor about these changes call 0300 303 1073 or text ‘change’ to 80018 and an advisor will call you back.