Posted on February 26, 2020 at 2:23 pm by Nigel Brokenshire
The Financial Capability Strategy for the UK
The Financial Capability Strategy for the UK does not roll off the tongue that easily but it is a report that was commissioned by Money Advice Service (an independent organisation which gives free, unbiased money guidance) and was published in October 2015 to explore peoples’ financial capability.
There was another study carried out in 2019, the results of which can be viewed here.
What makes it an interesting read is that it underpins the reason I developed BeeMyMinder. So I thought it would be good to inform my readers of some the findings and what is happening with BeeMyMinder to help with their next steps.
In summary, the survey found that the levels of financial capability across the UK are low. It reported that many are at risk of falling into financial difficulties and are failing to seek help. Money was a constant worry, regardless of people having different needs at the different stages of their lives.
Some key statistics being reported:
- 22% of people couldn’t read the bank statement to determine how much their account balance was
- Almost 9 million people are in over-indebted
- Almost one in five (17%) of work age families rarely or never save, with 19% having less than £100 in savings and investment
- 65% are not engaged in how they would manage financially if needing long-term residential care, with around 12 million people not saving enough for their retirement
- Nearly 50% of people with families don’t have life cover
- Around 12.4 million people could not easily pay an unexpected bill or expense of over £300
What was confirmed?
The research confirmed that:
- Financial capability needs to start at a very young age,
- As we move through life we need to build resilience to cope with financial shocks e.g. redundancy, illness,
- People spend more than they can afford because they feel under pressure to match spending behaviours of their friends and families,
- Financial difficulties impacts on peoples’ health, with more than half of those seeking support from the Money Advice Service having some type of mental health issues, and
- It recognises that technology offers new opportunities in helping people keep on top of their finances. But also risks.
With the three main aims to manage money well day to day; prepare for and manage life events, and deal with financial difficulties, as there is a lot to be done.
The What Works Fund
The Money Advice Service set up the What Works Fund to support the Financial Capability Strategy and in response to the research findings. They released £7million for the evaluation of existing interventions as well as piloting and evaluating new approaches that can make a measurable difference to people’s financial capability.
An opportunity for BeeMyMinder
I responded to the expression of interest on a number of inventions, all of which is to effectively evidence the value BeeMyMinder provides. Although our expression of interest was unsuccessful, we are still committed to:
- Removing the reliance on paper-based records and moving to online storage and reminder platform to help people save money and improve financial capability,
- Developing useful and meaning dashboards that provide immediate access to key information presented in a way that can lead to informed decisions, and lastly,
- Expand our service with a mobile app for both Android and iOS that will provide individuals instant access to their financial information which they have already loaded into BeeMyMinder; while on the go or in an emergency.