Nearly 13 million consumers could make more of their money if product ideas generated by a Cabinet Office charity are curated by the financial services sector.
The Behavioural Insights Team (BIT), a social purpose company part-owned by the Cabinet Office, charity Nesta and its employees, works to make public services more cost-effective and easier for citizens to use.
It has partnered with the Money Advice Service (MAS) to work in a financial capability lab to develop new ways to tackle challenges faced by financially squeezed households. The BIT said almost one in four adults in the UK are financially squeezed (12.7 million individuals).
Working with more than 90 experts, the lab generated around 240 ideas to tackle everyday money challenges. The 17 strongest ideas were tested in the lab, these included:
• Making it easy for people to bank savings on their weekly shop;
• Using current account transaction data to offer timely help and support;
• Helping people to block unsolicited high-cost credit offers.
The BIT said the tests used a mixture of methods including its online experimentation platform Predictiv, as well as consumer focus groups and interviews led by Ipsos MORI.
Sarah Porretta, UK financial capability director at the MAS, said: “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 BIT, added: “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.”