This week (12th to 18th November) is Talk Money Week, an annual celebration of the work thousands of organisations are doing to improve money management across the UK, and it seems that the time is ripe for innovation in how we talk about and manage our money.
Many people in the UK are still struggling to manage their finances, with little or no savings and fluctuating incomes contributing to rising personal debt. Latest figures from The Money Charity highlight that 301 people a day were declared insolvent or bankrupt from April to June 2018, the equivalent of one person every four minutes. Being able to manage your money well, especially in times of economic uncertainty, is an important life skill, especially for those people who have a limited or low income.
Over the past two years, there has been a considerable amount of work being done across the public, private and third sector to test, adapt and grow a range of products and services that will help people to better manage and maximise their money.
Since 2017, Nesta and DCMS have been supporting a range of organisations to scale their solutions to helping young people and their families to improve their money management skills and reduce debt through the Savers Support Fund. Over the next six to 12 months we will be showcasing each of the five organisations we have funded, sharing more stories of the people whose lives have been changed and demonstrating the impact of their work.
More recently, through a partnership between Nesta and the Cabinet Office, the Inclusive Economy Partnership has been changing the way that government, business and civil society work together to address some of society's toughest challenges, including funding innovators to grow their work to improve financial inclusion and capability. Nesta’s Partnership Accelerator Programme supported financial social innovators including Credit Kudos, which is developing a new credit scoring mechanism, and Just Finance Foundation, which provides financial capability training.
One piece of work within the main financial capability sector that stands out as pushing forward change, is the What Works Fund from Money Advice Service (MAS). Since early 2017, MAS has supported 65 organisations, with a total fund of £11.3m to deliver projects and develop evidence specifically focused on what works in developing people’s financial capabilities. The What Works Fund forms part of the network of What Works Centres including the Whats Works Centre for Children’s Social Care, which Nesta has been involved in the development of, and has been a key driver for a more developed evidence base in this area.
The key findings from the What Works Fund were published In October 2018 and focused on evidence across life stages. These include:
Elsewhere in the sector, there are other promising new developments. The establishment of the Single Financial Guidance Body in October 2018 will bring together Money Advice Service, The Pension Advisory Service and Pension Wise and have recently launched their call to action which outlines its focus over the next few years.
As announced in the recent budget, there is also a continued commitment to utilise £55m of dormant assets funding to improve financial inclusion with the emergence of a new Financial Inclusion organisation, due to launch in early 2019. The funding will be used to to increase the use of fair, affordable and appropriate financial products and services that boost savings, increase protection against shocks, smooth incomes and increase access to fair, affordable and appropriate credit.
Alongside the End High Cost Credit Alliance that was launched by actor Michael Sheen earlier this year, these all point to definite signs that many people are coming together to look at how best we tackle these challenges.
But more needs to be done. Here are four areas that we feel need to be focused on:
We’ve seen a significant shift in the way that people talk about mental health in the past few years, and now we would like to see that shift in talking about money. Despite numerous new innovations leading the way, we have a long road ahead of us to ensure that everyone has access to the support, products and services they need to be fully financially capable.
If you’ve got a great idea about how Nesta can take this work forward, or would like to let us know about a brilliant innovation happening in your area then please comment below or drop me an email at [email protected].