Evaluation Scotland Wales

Evaluating financial capability interventions for the 25% of us vulnerable to financial difficulty

The new fund

The second round of What Works funding – the new fund – has tested and evaluated financial capability interventions that have focused more specifically on the 1 in 4 members of the UK population who are financially ‘squeezed’. This group could fall into financial difficulty with one unexpected bill. This approach targets some of the gaps in evidence that were not examined by the What Works Fund.

Focus areas for the new fund

The new fund has explored the following strands in 2018:

  • Building long term resilience: understanding the relationship between financial capability and debt advice: finding out what good practice exists already, and supporting the sharing and development of this.
  • Pilots from the Financial Capability Lab: in 2016, we set up and ran a Financial Capability Lab to generate and rapidly test a range of ideas and solutions to tackle financial capability challenges. Working with BIT we will be exploring working with potential partners to take forward the most promising results from the lab tests and piloting them in the real world. Find out more about our Fin Cap Lab
  • Financial capability in the workplace: evaluating both new and existing interventions to build our knowledge and understanding of what works through a channel that has huge potential, we are funding two workplace pilots that explore the effectiveness of automated payroll savings.
  • FinTech: starting to understand the role that fintech can play in promoting financial capability, by funding the evaluation of the winning entries of Tech City UK’s FinTech For All competition.

Building long term resilience: understanding the relationship between financial capability and debt advice

Background

As the statutory body for financial capability and major funder of debt advice in the UK, The Money Advice Service (MAS) has committed to exploring the synergy between financial capability and debt advice, incorporating this into our debt commissioning strategy 2018 – 2023.

We will draw heavily from the financial capability framework, which sits at the heart of The Financial Capability Strategy for the UK, and the debt advice outcomes framework. It has drawn on extensive research and analysis to identify the behaviours that support financial wellbeing and the mindset and abilities that underpin those behaviours.

The project has been designed with the assistance of the wider debt advice and financial capability community who submitted into an earlier call for evidence. We are grateful for the contributions we received, which have helped identify overlaps and gaps in the provision of integrated advice.

Call for funding

MAS is delighted to fund a project to understand how to support clients in improving their financial capability alongside debt advice. This research will provide insight as to what is needed to make sure that advisers feel equipped with the right resources, training and techniques to empower clients to improve their financial capability.

As a client receives debt advice there is often a conversation about how to manage money better on a day-to-day basis when carrying out the budgeting step. From setting money aside for annual expenditures like MOTs or Christmas, to ensuring clients don’t skip meals to make debt payments, these conversations are asking clients to make significant behavioural changes which may have a strong impact on debt advice outcomes.

However, occasionally opportunities to help clients avoid future problems can be missed, as recognised in The Better Debt Advice report.

We are now giving debt advice providers the opportunity to be at the forefront of improving debt advice in delivering effective financial capability outcomes. They will benefit from:

  • A free detailed insight into their current tools and techniques of empowering clients in their financial capability at the point of setting and reviewing a budget
  • Experience of working with an established research partner in a detailed insights and evaluation project
  • A grant of up to £20,000 to cover the costs of working with the research agency.

Notes for grantees

Organisations selected will need to commit to:

  • Attending a half day workshop with the research partner and other participating organisations
  • Working with the research partner to help them gather data – showing them processes, training and perhaps giving them access to clients for survey
  • Working collaboratively with sector colleagues by consenting to make the research findings publicly available through a summary report.

Key application questions

The key questions in the application are:

  • How does your organisation identify areas where the client could shift their mindset, increase their abilities and/or change their behaviour in ways that might improve their financial wellbeing?
  • What support do you provide to clients to make these changes? (For example, through take-away resources, staff training, systems and tools, referrals to other organisations etc.)
  • Who in your organisation would manage the relationship with the evaluation partner and what relevant experience do they have?

How to apply

Organisations interested in the fund will need to submit an application by 5pm 22 November 2018.

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