Time is money

men going through a prison wing gate blurring into a picture of an out of service cash machine

Charities’ report concludes turning people in prison into taxpayers will require a step change in access to financial services

To deliver its ‘rehabilitation revolution’, the coalition government must secure the support of bankers and insurers who refuse access to basic financial services for people with convictions, argue the authors of Time is Money: financial responsibility after prison.

Download the report here.

The joint report, published today by the Prison Reform Trust and UNLOCK, the National Association of Reformed Offenders, argues that exclusion from bank accounts, insurance and affordable credit is preventing former offenders from getting into work and securing a home and forcing their families into debt.

The Ministry of Justice highlight stable employment and housing as the most important factors in reducing the risk of reoffending but achieving either is difficult without access to basic financial services. With the MOJ expected to make savings of 23% in the current spending period, it cannot afford to miss this chance to reduce reoffending and cut prison numbers.

Chris Bath, co-author of the report, said:

Financial services are a crucial foundation for engagement in modern society. If we want people to lead productive lives; working, paying taxes and providing their family with a home, we cannot allow the justice system to sever people from their finances, even less to create lifelong financial exclusion.

The report found that a third of people in prison did not have a bank account and that more than half had been rejected for a bank loan. People in prison were ten times more likely to have borrowed from a loan shark than the average UK household. This, the report argues, drives up crime as people take desperate measures to avoid the often violent techniques of unlicensed money lenders.

A person interviewed in prison by the researchers said:

The reason I’m in here, I did it to get money to pay off my bills. I regretted it from the moment I agreed to do it. But there was no other way at the time to pay my debts. I tried banks. I’d already asked my mum for far too much. I now know I could have discussed it with the people I owe, to pay off what I could. But I didn’t think of that. I’ve got two years to regret it.

More than half of families said they’d taken on debt since their relative’s conviction but only 5% of people in prison had been asked how their families would cope financially while they were in custody.

Rather than tackling these issues, the justice system exacerbates financial exclusion, the report claims, highlighting how 64% of former prisoners felt that their debts had worsened during their sentence and more than four in five former prisoners had difficulties securing insurance.

The report also criticises a prison culture which discourages people from taking personal responsibility, finding that three quarters of former prisoners had never been asked about finances. Among the key recommendations are ‘real wages’, in line with Ken Clarke’s recent proposals to introduce ‘real work’ into prisons.

Juliet Lyon, Director of the Prison Reform Trust, said:

Far too often people leave prison only to face a second sentence of no insurance or banking, mountainous debt, loan sharks circling and a family to provide for. The rehabilitation revolution stands or falls on banks, insurers, public agencies and government working together to allow people to take financial responsibility for themselves.

Chair of the Friends Provident Foundation, Ashley Taylor, said:

Society intends prison to punish individuals for their crimes not ruin their lives and those of their families, yet that is the effect that serving even the shortest sentence is having on prisoners, denying them access to the most basic financial tools for living and contributing to today's society.

Friends Provident Foundation is delighted to have supported this groundbreaking research by the Prison Reform Trust and UNLOCK, highlighting key areas for change required by both the financial services industry and public agencies.