New research released by the Financial Capability Lab has showcases some innovative ideas aimed at tackling everyday money challenges. The Financial Capability Lab – a partnership between the Money Advice Service (MAS) and the Behavioural Insights Team (BIT)– was launched to develop new solutions to help people make the most of their money.
Working with more than 90 experts, this new thinking generated over 240 ideas. The 17 strongest were tested in the Lab including: making it easy for people to bank savings on their weekly shop; using current account transaction data to offer timely help and support; and helping people to block unsolicited high-cost credit offers. The tests used a mixture of methods including BIT’s online experimentation platform Predictiv, as well as consumer focus groups and interviews led by Ipsos MORI.
Sarah Porretta, UK Financial Capability Director at the Money Advice Service, said “Improving people’s financial capability is a complicated challenge that requires a set of different approaches and collaboration across government, third sector and the financial services industry. We all have a complex relationship with money. Behavioural science tries to make sense of how we all make decisions, so that we can predict behaviours and ultimately help people manage their money better.”
“The great thing about the Lab ideas is that they can be taken forward with different partners in the context of their own products and services. I am delighted to say that we are already exploring one idea with a major UK bank and are keen to talk to other potential partners to move these ideas forward.”
Elisabeth Costa, Director at the Behavioural Insights Team, said: “Too many households struggle with their finances. The reality of living without a financial safety net means that an unexpected bill or repair could tip people into problem debt. This has broader implications for wellbeing. That’s why it’s so important we bring fresh and evidence-based thinking to the UK’s most pressing money management challenges. We set up the Financial Capability Lab with a focus on behavioural science and rapid, robust testing. We’re now thrilled to be bringing partners on board to test our most promising ideas at scale.”
The Lab is part of the ten-year Financial Capability Strategy for the UK devised by MAS to deliver a step-change in how people in the UK manage their money. The Lab has already attracted interest from the financial services industry and seeks further partners – from leading businesses to charities – to conduct a series of field trials over the next two years.
Key statistics from the research include:
- 1 in 4 people in Britain are ‘financially squeezed’ meaning they could get into financial difficulty with one unexpected bill
- The Financial Capability Lab tested 17 ideas – informed by behavioural science – to tackle some of the UKs most common money management problems
- The Lab invites partners to put these ideas into practice, work that could ultimately be scaled up to help more than 12.7m Britons