IT’S OFFICIAL: the UK is back in the red. It seems that all the budget cuts and austerity packages didn’t make a difference, because we are in recession yet again, and this time, financial hardship looks set to stay for the foreseeable future.
Whilst the government flounders around saying we are all in this together, a huge number of Brits are struggling for cash. People applying for payday loans or cash advances have risen to an all time high, with millions unable to make their money stretch from one pay cheque to the next.
The average household’s income is falling, whilst the UK’s richest get richer, and the government-owned banks are refusing to lend small businesses money whilst the economy is still in turmoil.
It’s no wonder so many people say they no longer trust banks or the failing financial system.
Bearing all this in mind, I think it’s time we really did adopt the ‘all in it together’ mindset. I think it’s time we invested in the black pound and went back to basics by participating in the old Caribbean tradition of pardner.
As I’ve got older, I’ve become more aware that my future prosperity depends not on a pension plan or even property, but on building a reserve of cash. I have also become a lot more conscientious. If I can save money, increase the value of the black pound and encourage others in my community to do the same, then I will be happy. That is where a pardner or partnership scheme comes in.
For those of you who may not be familiar with this alternative method of money-management, here’s how a pardner works: a group of people regularly agree to save a set amount of money and each week or month, they submit, or ‘throw’ this fixed sum – known as a ‘hand’ – to one member of the pardner group. The participants then take turns to ‘draw’ on or take out the money at specific intervals, until each member has taken a lump sum and paid in the same amount that they have ‘thrown’ in.
For many of us, pardners have been a tradition in our families. I can remember my grandmother, mother, aunts and uncles making sure they paid their money into a pardner and when it was time to get the money back, (in my mother’s case she liked it back as late as possible, usually at Christmas), our family had a good time spending it.
The great thing about pardners is that unlike most financial arrangements, there is no interest, no handling charges and no administration or late fees. And it is certainly not a loan shark situation, where people charge illegally high interest rates, because it is not a loan, just a secure community holding.
But despite the benefits of this scheme, in the last few decades, our community has moved away from this tradition and put more faith into banks and credit cards. In short, pardner has lost its allure.
This may be due to the fact that bank accounts, credit cards and Individual Savings Accounts (ISAs) are now easily available to all, whereas in my grandparents’ younger days, they did not have access to such things and had to rely on members of their community to build stable finances.
Sadly, we are losing that valuable bond; the attitude that our parents and grandparents had of working together to build something that they could all profit from, has largely become a thing of the past.
But in addition to the financial benefits of pardner schemes, there is also something to be said for the feeling of satisfaction you get when you know that you are responsible enough to save money, and that your friends and family can benefit from it in one way or another.
I will admit: I have a problem with saving money in a bank. The money goes in but it doesn’t stay there for long. As soon as a hot weekend arrives, or someone’s birthday is on the horizon, that money is out of my account as quickly as I can type my pin number into a cashpoint machine.
But knowing that when I put my money in the hands of someone I trust – and someone who will not give me the money back until it is my time to receive it – allows me to have a certain amount of discipline, even if I don’t have much choice in the matter.
I also like knowing that the money I contribute is helping someone I know and not sitting in a vault somewhere, increasing the funds of a billionaire CEO and allowing them to gamble with my money somewhere in the City.
In addition, with a pardner scheme – unlike a bank loan – if you don’t have your fixed sum to put in on any given week or month, it is more easily managed. Amongst the trusted members of the group, your late-date payment can be decided, allowing you extra time to secure your hand. And in this situation, you can have the peace of mind of knowing that you will not be charged a late fee, or incur any negative marks on your credit score.
Of course, it would not be acceptable to continuously put your hand in late. After all, the whole point of the pardner scheme is for each member to put in their agreed sum at the same time. But dealing with trusted friends or family means there is a greater level of flexibility if you fall on hard times.
It goes without saying that before agreeing to be involved in such a system, you have to be sure you know and trust the people you are saving with – because between friends or family, there is no law to govern the scheme.
But that is part of the flexibility, because after all, the key to creating a strong and stable financial community is trust.
Tell us what you think. Email your thoughts to: hazelann.williams@gvmedia.co.uk