Young people leaving care have long experienced financial difficulties when they move out of the care system. The sharp rise in the cost-of-living has exacerbated an already difficult situation as care-experienced young people without the financial cushion of ‘the bank of mum and dad’ attempt to manage their money and avoid debt.
This report draws on our experience of working with care-experienced young people to better understand the impact of the cost-of-living crisis, particularly on young people when they first leave the care system.
We are calling the Government and the financial services sector to introduce our six recommendations which would provide extra support for young people after they leave care, just as parents provide ongoing support to their young adult children.
Life for young people in and leaving care
There are over 80,000 children in local authority care in England and every year around 12,000 leave care, most when they turn 18 although some leave care as young as 16 (Department for Education, 2023). Life for these young people can be tough. Many have faced significant trauma in their lives and while some will have had a relatively stable experience in care, living with the same foster family, others will have been ‘bounced around’ the system, between many different homes and schools.
When young people leave care, they experience a significant drop in the level of support they receive. Many are expected to manage alone before they feel ready and they often struggle with issues such as managing their own tenancy, living on a low income and struggling because they feel lonely and isolated.
For all these reasons, we are urging the Government to provide a support package for care-experienced young people to help them through the current crisis. In the longer term, we believe care leavers would benefit from support from their corporate parent to ensure they are aligned with non-care-experienced young people who have the benefit of their parents’ financial support as they make those first steps into adult life.
Kay, 23
Care-experienced young person
The impact of the cost-of-living crisis on care-experienced young people: key findings
Our research found:
- the high initial costs to set up a home mean care-experience young people often struggle from the moment they begin living independently
- rising prices are making it difficult for care-experienced young people to afford essentials
- care-experienced young people are resorting to high-cost credit so they can afford the essentials
- financial struggles are increasing many care-experienced young people’s feelings of loneliness and isolation and worsening mental health
- care-experienced young people often receive limited financial education and experience difficulties accessing current and savings accounts
Chloe, aged 22
Care-experienced young person
Alan, aged 19
Care-experienced young person
Six ways the Government can support care leavers
All the young people spoken to as part of this research were struggling with the demands of living independently at such a young age, and without the safety net of a family support network. These young people have been in the care of the state, with the Government as their corporate parent. That’s why we are calling on the Government to step in and provide an extra package of support for young people after they leave care, just as parents provide ongoing support to their young adult children. This is urgently needed now to help young people through the current crisis, but it’s also about improving their long-term prospects.
We asked the young people we spoke to what would help most, and they came up with six key ideas that could form part of a care leavers’ support plan from the Government. These are that:
- the Department for Work and Pensions should ensure that all care-experienced young people who are claiming Universal Credit receive the over 25 rate
- the Department for Education should commit to increase the existing care leaver support in line with inflation
- the Department for Education and the Department for Work and Pensions should work together to introduce a rent guarantor and deposit scheme accessible to all care-experienced young people
- the Department for Transport should introduce a national scheme to provide free bus travel to all care-experienced young people
- the Department for Health and Social Care should improve access to mental health support
- the banking sector should work alongside care-experienced young to produce guidance for the sector on how to support care-experienced young customers
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Young people leaving care
Leaving home is a challenge for everyone, but young people leaving care often do so without the support of a loving family. Learn more about the support we offer young people leaving care
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Free bus travel for care leavers
Many care leavers find leaving foster or residential care a lonely and isolating experience. However due to the cost of bus passes, travel to meet with family and friends can feel like a luxury. That’s why we are calling on the government to fund free bus travel for all care leavers aged 18-25 in England.
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Our policy work
We call for improvements to the law, policy, and professional practice informed by the experiences of the children and young people we support and our own evidence-based research.