Encouraging debt advice clients to save using behavioural science

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A guide to increasing take up of the savings option on the Standard Financial Statement or its equivalent.

The Money and Pensions Service (MaPS) has developed behavioural science ‘nudges’ to encourage debt advice clients to save or continue saving during their debt plan. These nudges can be used by debt advisers when establishing or reviewing solutions.

While not everyone’s financial circumstances will allow them to save, many others will have this opportunity through the Standard Financial Statement (SFS) savings category. (1) MaPS is keen to promote this option.

Key findings

Over a five-month period, MaPS applied this intervention with two providers: Angel Advance, a fee-charging debt management company, and Christians Against Poverty (CAP), a charitable organisation giving free advice. To measure its effectiveness, the study compared change between a treatment group of clients who experienced the nudges and a control group of clients who did not.

  • Framing savings as a way to create financial resilience and using mental accounting had the greatest impact among the different nudges used.
  • Creating a ‘safety net’ of savings to be resilient against financial shocks, such as unexpected bills, has the largest impact when motivating clients to save with 43% of clients in the treatment group were definitely encouraged to save or continue saving compared to 32% in the control group.
  • Framing saving with a specific goal to achieve in a specific time has a significant positive effect in the numbers of clients choosing the savings option on their SFS or its equivalent. 44% of clients in the treatment group found this very useful for them to save or continue saving compared to 33% in the control group.
  • Nudges can be used in combination with an automatic saving opt-in when agreeing a debt solution.
  • Results also show a clear link between positive financial behaviours and clients who have less time remaining on their repayment term, as well as positive financial feelings and behaviours for longer term clients (with a relationship of six months or more).

We encourage debt advice providers to look at the summary report and use the learnings with the guidance on applying nudges provided to adopt this savings initiative. It is our hope that our findings will influence change across the sector by increasing the use of the savings category and helping more people in debt.

Further research and evaluation

The full report for this initiative, and two other debt advice service prototypes informed by behavioural change thinking can be found in the Changing behaviour to provide innovative debt advice services (2020) reportOpens in a new window (PDF/A, 4MB). This research provides insights and best practice when implementing behavioural changes within debt advice service organisations.

You can also download the evaluation report by BVA BDRC on this initiative, Savings and Innovation: A Service Prototype (2020)Opens in a new window (PDF, 1.6MB)

  1. The regular savings option on the SFS or equivalent form allows debt advice clients to keep a small amount of unassigned savings for future use (up to 10% of available income, with a cap of £20 per month, for the SFS). These statements are used by advisers to summarise a client’s income and outgoings, along with details of any debts. All clients agreeing a debt solution complete an SFS or comparable statement, which is reviewed, often yearly.