Expert-led financial education “elevates playing field” for UK’s vulnerable young adults.
MyBnk is pleased to announce the findings of a yearlong impact study of our ‘survival’ money management programme, Money Works. Independent evaluators, ERS, examined its effectiveness with over a thousand 16-25 year old NEETS and care leavers, who are on average more likely to be in poverty and have problem debt.
The report showed:
- £1 spent on the programme created £5.57 in social value and the impact increased as time went on.
- Debts dropped 60%. This compared to control groups of their peers, who saw their average debts grow by 50%.
- The number saving regularly increased by 23%.
- Over half would now seek specialist advice, up from 32%, from the likes of StepChange or Citizens Advice.
- Capabilities of young people in saving, financial confidence, life satisfaction and digital literacy, which were below the national average, are now above it.
Using the respected Housing Association Charitable Trust social value model, the £156m cost of providing the UK’s 800,000 Neets and 10,000 annual care leavers with financial education is outweighed 5.6 times over – reducing debts, increasing savings and alleviating financial burdens. That is a £874m national return!
Legal duty – Investing in young people
This year, the Children and Social Care Act placed a legal duty on local authorities to protect young care leaver’s economic wellbeing and ensure access to financial information. In 2016 The Children’s Society found that almost half of councils in England fail to offer these services.
ERS’ findings strengthen the case for providing trained expert money guidance for vulnerable young people, which is backed by reports from the All Party Parliamentary Groups on Financial Education for Young People, and on Ending Homelessness, and the Mayor of London.
The National Audit Office found problem debt is costing UK taxpayers £248m and wider society £900m per year. 18-24 year olds have average unsecured debts of £1,460 and are the UK’s fastest growing group of debtors, according to the Financial Conduct Authority. They are also the most susceptible in society to fraud and scams, says the Policy Network.
Money Works covers independent living, digital finance skills and debt prioritisation. It tackles topics such as budgeting and habits, the financial system, borrowing, how taxes, banking and benefits work, and accommodation. Sessions were delivered by MyBnk via councils leaving care units and employability programmes run by organisations such as the Princes Trust and Premier League Works.
The research was funded by the Money Advice Services’ £12m ‘What Works’ Fund: a two-year investment programme designed to test and pilot potential new financial capability solutions, scale up interventions and evaluate existing projects across the UK. It evaluated Money Works’ programmes’ theory, outcomes, causality and value for money.
MyBnk found vulnerable young people were below the national average for their peers across a range of indicators, but after intervention, exceeded their more capable peers in the long term:
The study showed:
- Life satisfaction increased by 28%.
- There was a 24% improvement in financial confidence.
- More now go online to make government transactions, such as paying tax, than the national average – boosting digital literacy.
It may also be more effective to direct resources outside of London. ERS discovered a greater social return on investment of £8.19 for every £1 versus £4.05 in the capital. The programme therefore helps those most in need, as young people outside London were found to have lower financial capabilities. Money Works closes this gap.
- Case studies – Institutions.