Department for Work and Pensions Research Report No 172 Social Fund use amongst older people Elaine Kempson, Sharon Collard and Sally Taylor A report of research carried out by the Personal Finance Research Centre, University of Bristol on behalf of the Department for Work and Pensions Corporate Document Services © Crown Copyright 2002. Published for the Department for Work and Pensions under licence from the Controller of Her Majesty’s Stationery Office by Corporate Document Services, Leeds. Application for reproduction should be made in writing to The Copyright Unit, Her Majesty’s Stationery Office, St Clements House, 2-16 Colegate, Norwich NR3 1BQ. First Published 2002. ISBN 1 84123 485 0 Views expressed in this report are not necessarily those of the Department for Work and Pensions or any other Government Department. Printed by The Charlesworth Group (Huddersfield, UK). Contents iii Contents Acknowledgements .............................................................................................................. vii The Authors ......................................................................................................................... viii Glossary ................................................................................................................................ix Summary ............................................................................................................................... 1 1 Introduction....................................................................................................................... 7 1.1 The Social Fund ........................................................................................................ 7 1.2 Objectives of research ............................................................................................... 8 1.3 Previous research ...................................................................................................... 9 1.3.1 Level of need, or perceived need................................................................... 9 1.3.2 Attitudes to borrowing in general ............................................................... 10 1.3.3 Attitudes to borrowing in general ............................................................... 11 1.4 About the research ................................................................................................. 13 1.5 This report .............................................................................................................. 14 2 Living standards ...............................................................................................................15 2.1 Why were people receiving MIG?............................................................................ 15 2.1.1 Health problems ......................................................................................... 16 2.1.2 Low-paid employment ................................................................................ 16 2.1.3 Better-off in the past but insufficient provision for old age .......................... 17 2.1.4 Better-off in past, but insufficient provision due to disruption ...................... 17 2.2 Living standards among people receiving MIG ......................................................... 18 2.3 What factors determined people’s ability to manage? ............................................. 18 2.3.1 Circumstances that led to receipt of MIG .................................................... 18 2.3.2 Additional financial assistance ..................................................................... 19 2.3.3 Additional expenditure ............................................................................... 19 2.3.4 Overview .................................................................................................... 20 2.4 High spending priorities .......................................................................................... 21 2.4.1 Food .......................................................................................................... 21 2.4.2 Heating ...................................................................................................... 22 2.4.3 Household bills ........................................................................................... 22 2.4.4 Other spending priorities ............................................................................ 22 iv Contents 2.5 Low spending priorities ........................................................................................... 23 2.5.1 Buying new clothes .................................................................................... 23 2.5.2 Going out socially ....................................................................................... 23 2.5.3 Holidays and days out ................................................................................. 24 2.5.4 Smoking..................................................................................................... 24 2.6 Lump sum payments............................................................................................... 25 2.7 Summary ................................................................................................................ 26 3 Saving and borrowing ...................................................................................................... 27 3.1 Saving .................................................................................................................... 27 3.1.1 Current savings........................................................................................... 28 3.1.2 Informal saving ........................................................................................... 29 3.1.3 Active savers .............................................................................................. 30 3.1.4 Changes in saving behaviour since retirement ............................................. 30 3.1.5 Could people have saved more over their life-time? .................................... 30 3.2 Borrowing .............................................................................................................. 31 3.2.1 Current credit use ....................................................................................... 32 3.2.2 Changes in commercial credit use ............................................................... 33 3.3 Overview of saving and borrowing .......................................................................... 33 3.4 Summary ................................................................................................................ 35 4 Social Fund needs ............................................................................................................ 37 4.1 Past needs and how met......................................................................................... 37 4.1.1 Meeting the costs of moving into sheltered housing .................................... 39 4.2 Current needs ........................................................................................................ 39 4.2.1 Unmet needs .............................................................................................. 40 4.3 Health and potential eligibility for Community Care Grants...................................... 41 4.3.1 Physical health ............................................................................................ 42 4.3.2 Mental health and learning disabilities ........................................................ 42 4.3.3 Potential eligibility for Community Care Grants............................................ 42 4.4 Deciding how best to meet needs ........................................................................... 43 4.4.1 A family emergency .................................................................................... 43 4.4.2 Moving into sheltered housing .................................................................... 44 4.4.3 Replacing a washing machine ..................................................................... 45 4.5 Summary ................................................................................................................ 46 5 Knowledge of, and attitudes to, the Social Fund............................................................... 47 5.1 Knowledge of the Social Fund................................................................................. 47 5.1.1 People with a high level of knowledge ........................................................ 48 5.1.2 People with only vague awareness .............................................................. 48 5.1.3 People with no knowledge at all ................................................................. 49 5.2 Explanations of levels of knowledge ........................................................................ 50 5.3 Sources of information ........................................................................................... 50 Contents v 5.4 Attitudes to the Social Fund .................................................................................... 51 5.4.1 Applicants’ views ........................................................................................ 51 5.4.2 Non-applicants’ views ................................................................................. 52 5.4.3 Non-applicants’ willingness to apply to the Social Fund ............................... 52 5.5 Summary ...............................................................................................................