Nationwide Building Society has launched a start-up challenge, calling for ideas to help tackle the so-called poverty premium, which sees poor people pay more for essential services.
According to Fair By Design, the lowest paid Brits are subject to a poverty premium of up to an extra £478 a year for essentials due to increased costs of services and access to finance.
The number of households affected is on the up thanks to Covid-19, with the Legatum Institute estimating that almost 700,000 additional people faced poverty during the Winter of 2020 as a result of the pandemic.
Nationwide is investing £2.5 million in the Fair By Design Fund, a venture fund pumping capital into businesses making markets fairer.
The building society is also launching a start-up business incubator programme aimed at supporting firms tackling poverty.
- Applications for the programme open today, with the first challenge focused on six main themes:
- Affordable credit
- What happens if you are declined for credit
- Housing
- Fair access to essential goods and services
- Income smoothing
- Wider implications of a poor credit score
Successful applicants will join the incubator in two phases: Explore and Build
In Explore, organisations will receive £30,000 of investment from Nationwide to support three months of investigation alongside support from experts through testing and development. Some will then move onto the Build phase, an additional six months in the incubator to build and scale their solutions, for which funding will also be available.
Claire Tracey, chief strategy and sustainability officer, Nationwide, says: "Individuals living on a financial knife-edge are forced to pay more for basic goods and services. This is simply not right, nor fair.
"Through providing meaningful support alongside funding, we are looking to help transform the lives of those living in poverty through scaling long-term solutions to help tackle the challenges this presents."