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Living independently requires a care leaver to manage their money, pay their bills on time and live on a budget.

However, due to poor financial education and support prior to and on leaving care, care leavers often find themselves in debt. This can make them much less likely to undertake further study or an apprenticeship. Understanding what bills need to be paid is just as crucial as knowing how to go about paying them. Unfortunately, by the time care leavers receive support they are often already in debt.

Part of the problem is that children living in care aren’t always exposed to the way household decisions are made or how to budget. This is particularly the case for children living in children’s homes, as things will often be run from the office and in a different way to a family home.

Some care leavers will receive lump sums of money when they turn 18, perhaps savings their carers have made, their Junior ISA, inheritance or the leaving care grant. However, without proper support, care leavers can be without the skills to know how to spend large amounts of money wisely.

It can be all too easy to fall into debt, compounded by the relative ease with which payday loans can be accessed, as opposed to bank loans. Even opening a bank account can be difficult to access for care leavers, as most require proof of address and other identity documents that not all care leavers have. Again, without some financial education, care leavers may lack an understanding of how bank accounts work, the ability to choose the right one for them and the confidence to go in to a bank branch and open an account.

 

Studying

Care leavers who are studying should be able to receive some financial support to help them with their studies. If at university, they will be able to access the HE Bursary, a tuition fee loan and maintenance loan from Student Finance, and many HE institutions offer grants and bursaries that care leavers may be able to claim. However, care leavers can find that this isn’t enough to make ends meet and will often have at least one part-time job to help them while they are studying.

While tuition fee and maintenance loans are considered ‘good debt’, many care leavers are reluctant to take on any level of debt because their pre-care experiences have made them wary of owing money.

However, for students who are on apprenticeships, they can’t access the same level of financial support, often leading to a low take up.

 

Benefits

Unless they are in education or training, when care leavers reach 18, they are expected to earn enough money to support themselves. For many care leavers, this will mean applying for benefits. The benefits system is complicated, and not understanding the system can result in care leavers not claiming their full entitlements, or failing to meet requirements required for certain benefits. It can also result in care leavers being sanctioned. Often, care leavers will not understand why the sanction has been made. Without the right support and information, care leavers may not know that they can challenge their sanction – and although sanctions can be challenged, it can take a long time to be overturned, which can leave care leavers in severe financial difficulties.