Making Life Affordable

what-is-the-poverty-premium

WHAT IS THE POVERTY PREMIUM?

People in poverty or on low incomes often pay more for the same products or services than people who are better off financially. This is called the “Poverty Premium” – the extra cost of being poor. The Poverty Premium is often dubbed the ‘double penalty’: in addition to not being able to buy many goods and services, people in poverty also end up paying more for the ones they can buy.

A 2016 report by the University of Bristol revealed that the poverty premium paid by low-income families is, on average, £490 per year – enough for a family holiday, children’s clothes and shoes, or keeping a house warm in winter. According to Joseph Rowntree Foundation research, 21% of the UK’s population lives in low- income households.

what-is-the-fair-by-design-fund

WHAT IS THE FAIR BY DESIGN FUND?

The Fair By Design Fund will be managed by Finance Birmingham and Ascension Ventures, bringing nationwide reach and infrastructure for companies looking for funding in this space. The Fund will invest in companies seeking loans and equity funding from Seed through to Series A and beyond, and will share Ascension Ventures and Finance Birmingham’s co-investment philosophy, seeking deal-flow and co-investment opportunities from other funds, VC’s and angel investors.

The Fund has £8m ready to deploy, and is seeking to raise up to £20m.

The Fund will be investing primarily across these broad focus areas:

Energy

This area is focused primarily on electricity and gas. In most homes, energy is used for heating, cooking, lighting, electrical products, and heating water, with heating responsible for most energy consumption in the home. Low-income households often pay more for the energy they use, for example, through pay-as- you-go meters or by not switching suppliers

Finance

This area is focused on the problem lower-income consumers have accessing money and the management of everyday credit and savings. Everyone requires access to credit at various times and in differing amounts, especially low-income consumers, due to their smaller income and lack of savings. Often, low-income consumers pay more for their financial services, such as pay-day loans and cashing cheques early

Insurance

This area is focused on the problem lower-income consumers have accessing insurance. For example, there are few ‘no-frills’ insurance products suitable for low-income consumers. These consumers often also live in deprived areas, which may also be higher crime areas, and therefore might incur higher insurance premiums – there is crossover with the geo-based premiums

Geo-Based

This area covers a wide basket of costs that are imposed, or difficult to prevent, due to someone’s geographic residence. This covers food, insurance, transport, though this list is not exhaustive. Digital Exclusion can be included in this category; low-income consumers may not have access to the Internet, or be confident using it, making them unable to access online services to reduce household costs. This could range from shopping online to comparing insurance products

what-is-the-wayra-fair-by-design-accelerator

WHAT IS THE WAYRA FAIR BY DESIGN ACCELERATOR?

Wayra Fair By Design is a new acceleration programme that will tackle the poverty premium: where people in poverty pay more for many everyday goods and services – such as energy, insurance, borrowing, transport and food – than those who can more easily afford them.

The programme, which will be based in Wayra’s Open Future_ North facility in Oldham, will support up to seven start-ups a year.

Start-ups accepted to the programme will receive the equivalent of £70,000 in cash and business services, including working space at Open Future_ North and access to investors, mentors and coaches – and also potentially to a global audience through business development opportunities with Telefónica.

Through the new programme and accelerator, Wayra UK will support grassroots entrepreneurship in Greater Manchester and attract start-up talent, investment and business mentors from across the UK.

Wayra Fair by Design will be funded and supported by the Fair By Design Fund, a partnership between Big Society Capital, the Joseph Rowntree FoundationFinance Birmingham and Ascension Ventures.

The Wayra Fair By Design Accelerator is now accepting applications

If you want to find out more please get in touch