Social Innovation in Micro-Savings conference Brussels, 10 September 2013 Savings: a political...

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Social Innovation in Micro-Savings conference Brussels, 10 September 2013 Savings: a political issue

Transcript of Social Innovation in Micro-Savings conference Brussels, 10 September 2013 Savings: a political...

Social Innovation in Micro-Savings conferenceBrussels, 10 September 2013

Savings: a political issue

• a global network for exchange of knowledge and practice

• 4,000 practitioners, activists, researchers, institutions, policymakers

• goal: tackling poverty and inequality through community development approaches (focus on strengths; harnessing, connecting, mobilising people’s innate resources)

About IACD

Why does inequalitymatter?

“A smaller gap between rich and poor means a happier, healthier and more successful

population”(The Equality Trust)

• Discussions of poverty and inequality tend to focus on income, not wealth

• Income inequalities are relatively well understood• But assets are far more unevenly distributed

And yet…

UK: 1 household in 10 now has

total assets exceeding £1m The top 10% of households

earns 10 times the annual income of the poorest tenth;

The top 10% own 850 times as much as the bottom tenth (LSE, May 2013)

Asset inequality

Scotland:

• The highest earning 1% own approx a fifth of the UK’s marketable wealth

• ⅔ of households have less than £3000 in non-housing savings and assets

• 10-20% of people in UK have no assets at all

Do we care?

‘Building a Better America’ (2011): estimates of wealth distribution and wealth distribution preferences both differed dramatically from actual wealth distribution, irrespective of political stance

Without savings: Financial insecurity Vulnerability Inability to plan or to

make choices, e.g. about work or education

Why save?

With savings: Ability to weather

storms Opportunity to make

life-changing choices Inclusion in the wider

economy / in society Positive

intergenerational change

“Savings institutions are competing in a ‘race to the bottom’ as rates continue to fall across the market…”

“Austerity is making everyone hold onto their money… but every £1 you spend £1 that goes towards someone

else’s salary... Spending is the only way of fuelling growth…”

“There’s no point!”

Some viewson saving…

The cosy image ofcredit…

• Political and economic structures do not support saving by low-income people: Savings incentives tend to target higher earners Austerity measures = less ability to save Financial institutions not responsive to needs

• Asset inequality has a disproportionate effect on certain groups

• Culture of consumerism and popular myth (the “feckless” poor)

Why is this apolitical issue?

• Evidence shows that poor people can and do save• No direct link: saving and income levels• Behaviours can change• The process of saving can build:

– confidence– skills– social capital– assets: individual, family, community

Can poor people saveanyway?

An example of community asset-building: Self-Reliant Groups

• Savings matter!• Poor people can and do save• Many (most?) of us want a society where wealth is

more equally distributed• The process and outcome of saving can be an

integral part of building strong communities• BUT policies and economic structures must be

coherent and support saving by low-income people

In conclusion…

Continuethe conversation…

Theme of Day 3: Wealth

www.communityistheanswer.org

International conference9-11 June 2014Glasgow, UK

Email: [email protected]: gill.muskTel: +44 (0)1337 858808

www.iacdglobal.org

Thank you!