Affordability: the consumer perspective

How much money do you have?

For many of us, that isn’t as easy a question to answer as might be expected. For one thing, when we move beyond the kind of hand-to-mouth experience that characterised my own student days, things (fortunately) become a little more complicated. Any one individual may have a variety of assets, accounts, pensions, and so on. 

But more significantly, the answer to the ‘how much money’ question is in fact an interplay between assets, income, commitments and expenditure that at any given moment in time can be hard to establish. To give a simple example, having a balance of £2,000 in a current account doesn’t mean much if £3,000 in mortgage payments and bills are due to be paid in the same month.

Indeed, for many consumers, a better and more relevant question might be: “can I afford to spend this money, at this moment in time, or commit to this long-term cost given the state of my finances?” That, after all, is the main reason why we might want to know how much money we have (vanity aside).

And ultimately this is an issue of affordability.

What affordability means for consumers

At ClearStake we work with organisations who, for whatever reason, are committed to ensuring that their own customers do not get into financial difficulty. In some cases it is a regulatory requirement, in others, such as lending, it is both a legal requirement and a matter of protecting both parties. 

But what about helping consumers to help themselves? What about giving the same insight and knowledge, and the same protection, to the man or woman on the Clapham omnibus? We a