Financial Capability Strategy PROTECT Friday 8 July 2016 Helen White Head of Financial Capability The Money Advice Service UK wwwfincaporguk Enquiriesfincaporguk How we define financial capability ID: 573742
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The UK Financial Capability Strategy
PROTECTFriday 8 July 2016
Helen White
Head of Financial Capability
The Money Advice Service (UK)
www.fincap.org.uk
/
Enquiries@fincap.org.ukSlide2
How we define financial capability
2Slide3
3Scale of the challenge in the UK
Engagement is biggest challengeSlide4
Aim of UK Financial Capability StrategyPeople:Empower people to make the most of their money& navigate financial consequences of significant changes & events through life – both planned & unplannedThe Financial Capability Sector:
Evaluate the impact of activities on financial capability & behaviourShare findings, contribute to building evidenceDirect funding & resources to activities & methods that evidence shows work well in improving peoples’ financial capabilityMaximising COLLECTIVE IMPACT 4
(October) 2015 - 2025Slide5
COLLECTIVE IMPACT is more effective in overcoming the challenges & achieving change than isolated, uncoordinated impact. Slide6
DATA & EVIDENCE: The UK Framework6Slide7
National Survey of financial capability2015 Survey = baseline measure of UK financial capabilityLarge datasetNationally representative sample of 5,600 adults 18+130 questions to measure self-reported feelings, beliefs, attitudes, behaviours
Survey to be run every other yearAlso plan a survey of children, young people, parents & teachersConsidering a survey of older people in retirementSlide8
General Insights from 2015 SurveyMost people managing relatively well day to dayBut far fewer preparing well for future life eventsSkills & knowledge are less of a barrier than motivation for most, but pockets of low skillHelping people keep track of money day-to-day = building block for saving & preparing for future
Focusing people on goals for future motivates savingHaving a future focus is important – we need to understand how to encourage this8Slide9
9
Segment Summaries
Struggling
11.6M
Cushioned
24.5M
Squeezed
12.7M
23%
25%
48%Slide10
CUSHIONEDSQUEEZED
STRUGGLING“Young Adults in Affluent Homes”
“Affluent
Couples & Families”
“Comfortable
Younger Adults”
“Affluent
Pre-Retired”
“Comfortable
Pre-Retired”
“Comfortable
Retired”
“Squeezed
- Younger Adults”
“Squeezed
-
Younger families & couples”
“Older
squeezed”
“Over-Burdened
”
“Struggling
- Younger Adults”
“Struggling
- Pre-Retired”
“Struggling
- Retired”
Young
Adults
Couples
& families
Pre-retired
Retired
“Affluent
Retired”
… and 15 sub-segments
“Over-Burdened
”
“Struggling
- Younger Adults”
“Struggling
- Working Families”
“Struggling
- Pre-Retired”Slide11
Sub-Segments
Age
Financial Resilience
Financial resilience is a
scale based on credit,
savings and insurance
Struggling
Cushioned
Squeezed
11Slide12
12Slide13
13Slide14
14Slide15
Evaluation Toolkit15Slide16
16Evidence Hub
Evidence Hub brings the evidence on what works together in one place
Translates it for non-researchers
Features an easy to understand ratings system
Quality assured by the Personal Finance Research CentreSlide17
MAS ‘What works’ grant fund£7 million fund to be awarded as grants to build evidence on what works in improving financial capabilityAll projects must robustly evaluate impact using approach & tools created by Money Advice ServiceAll funded projects must share results publicly via MAS Evidence Hub17
3 types of projects to be funded:Existing financial capability interventions:
Evaluate impact on users, effectiveness in improving financial capabilityPotential to Scale up: Evaluate extension of existing interventions - already proven to be effective, - to different target group or wider geographical area
New approaches:
Develop, pilot & evaluate impact of new
ideas
Will tell us
what impact different types of activities & methods financial capability & behavior, & how big the impact on individuals
But more work needed
to measure the value of the impact,
relative
to costs, to determine return on investmentSlide18
‘The Small BIG’- Steve J Martin, Noah J Goldstein, Robert B Cialdini“It is not information per se that leads people to make decisions, but the CONTEXT in which that information is presented.”
“A small change in the setting, framing, timing or context of HOW information is conveyed can dramatically alter how it is RECEIVED and ACTED UPON”.18