CHASM Seminar: Can 'behaviourally-informed' financial education improve financial behaviour and savings among low-income participants?

Surprisingly yes, in contrast to previous research which finds little impact of financial education on the behaviours and outcomes of participants.

Speaker: William Brambley is a Behavioural Economist and Research Associate at the Open University's Centre for the Public Understanding of Finance.

William Brambley will present evidence from a series of field trials of ‘behaviourally-informed’ financial education intervention “Managing My Money for the Just About Managing”. Results suggest financial education – even light-touch, optional education that is free to deliver – can improve budgeting, spending, and saving behaviours and outcomes if the intervention is designed with insights from behavioural science in mind. This seminar will discuss the results, what ‘behaviourally-informed’ financial education is, and the implications of these for financial education interventions and policy.

Financial education has rarely been shown to have a significant impact on financial behaviour, despite being a frequently proposed solution for improving the public’s financial outcomes. Meanwhile, personal finance problems in the UK have continued to grow, most notably problem debt which now affects ½ a million people each year – disproportionately low-income families – half of which would be prevented if households had a small amount of savings to cover an unexpected expense, yet 1/3 of adults (16 million people) lack any savings at all.

Historically, most financial education has been focused on improving knowledge rather than changing behaviour.  Behavioural economics offers tools to design different forms of financial education that may prove more effective at changing behaviours. 

We designed one such intervention, aimed at improving budgeting, resilience saving, and day-to-day money managing among the Just About Managing – people not in financial distress but most at risk of falling into it – and tested it through 6 controlled field trials to measure the impact on behaviour and savings combined with in-depth qualitative interviews to analyse the mechanism. 

We found robust evidence of a one-off increase in resilience savings and improvements in budgeting and spending decision-making among participants.  Results on longer term savings behaviour and broader measures of financial outcomes were promising though less conclusive. 

This is an interdisciplinary project and topic, so we hope the presentation is relevant to anyone with an interest in personal finance, financial education, or behavioural economics, regardless of their discipline or background. We welcome any comments, particularly on possible implications of our findings or pathways to publish different aspects of this project. 

If you are interested in attending, please email Helen Harris – h.m.a.harris@bham.ac.uk.