The Money Advice Service

Transcription

1 The Money Advice Service Presentation to the ASIC FINANCIAL LITERACY COMMUNITY OF PRACTICE Jed Hodgson Financial Conduct Authority 1

2 Our mission We change people s lives by helping them make the most of their money To increase the financial capability of the population To help people tackle problem debt 2

3 Statutory role To enhance the understanding and knowledge of members of the public of financial matters To enhance the ability of members of the public to manage their own financial affairs Financial Services Act 2010 Working with organisations which provide debt advice services, with a view to improving: availability quality consistency Financial Services Act

4 About MAS In : We reached more than 8.4m people through our website Our funding allowed partners to deliver more than a quarter of a million free debt advice sessions 88% of clients acted on the advice they received Our customers took more than 16.5m actions to improve their financial situation as a result of our service 90% of users said they would use our service again 4

5 Funding Levies on the financial services industry Collected by the Financial Conduct Authority Total budget 2015/16: 81.1m ($162m AUS) 34.1m money advice ($68m) 47m debt advice ($74m) 5

6 Strategic aims To lead coordination of the many organisations that can contribute to achieving collective impact in improving financial capability creating a common understanding of problems and of ways to address them. and to support the strategy by filling strategic gaps: To support significantly more over-indebted people access free, high quality advice as early as possible to resolve their crises and build their long-term financial capability. To help people most at risk from income shocks to manage their money well day to day and save more. To enable more people to access the right information, advice or guidance (collectively referred to as financial help), when making financial decisions. To analyse and influence the regulatory, policy, and commercial environment so that more and better opportunities to integrate budgeting and saving support in to customer journeys, especially for segment 3, are realised. To improve the ability of a generation of children and young people to manage their money and take good financial decisions.

7 Our multichannel service Money Advice Service Offline Online Contact Centre Outsourced to single provider Face to Face Outsourced by nation to 3 Key Contractors, England and NI, Scotland, Wales Digital Service Designed and delivered in house Telephone Website Webchat Printed guides 7

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9 Working in Partnership We are working with, or developing partnerships with, hundreds of organisations to syndicate content and co-ordinate advice. Well over 1,000 organisations link to MAS content. Government and NFP Financial Services Lifestyle and Media

10 Current situation Levels of financial capability are too low 10

11 Financial Capability Strategy MAS has led the development a Financial Capability Strategy. We work with partners to improve people s ability to manage money well, both day-to-day and through significant life events, and their ability to handle periods of financial difficulty. It will focus on developing people s financial skills and knowledge, and improving their attitudes and motivation. 11

12 Financial Capability Governance MAS has taken a collaborative approach, working with colleagues across industry, Government and the third sector to achieve collective impact 12

13 Evidence and Evaluation Evidence and evaluation is fundamental to the success of the Strategy. MAS has committed to using evidence to ensure that: resources are directed to populations with unmet needs, and interventions which have been proven to work, and the impact of innovative new interventions is evaluated in a rigorous and consistent way. 13

14 Evidence and Evaluation MAS will achieve this through: growing the evidence base, through support to improve evaluation practice; and promoting greater sharing and use of evidence, by curating an Evidence Hub and supporting practitioners and funders to use evidence to inform intervention design. 14

15 Financial Capability Survey In June 2015, MAS conducted a survey into the financial capability of the. Interim results were published in November 2015 The Financial Capability Survey conducted interviews with a nationally representative sample of adults in the, including booster interviews in the devolved regions (Scotland, Wales and Northern Ireland) to ensure a robust base for analysis It will be conducted every two years to measure progress against the Financial Capability Strategy 15

16 Segmentation: Focusing on the right groups Using the Finanical Capability Survey 2015, MAS developed a segmentation based on income, savings, protection, credit and demographics. We are focusing on the squeezed group Segment Name Population (millions) Overburdened Struggling Squeezed Cushioned Population (%) 16

17 SQUEEZED 12.7M 24.9% Have financial commitments and relatively low provision for coping with unexpected income shocks DEMOGRAPHICS AGE 36 Average = 47 HOUSEHOLD COMPOSITION CHILDREN Have children in household HOUSE TENURE Mortgaged Owned outright Social rented Private rented 13% 36% 29% 18% 4% 1% 0% Single adult, no children Two adults, no children Single adult, children Two adults, children Confident managing money Confident choosing financial products Think HH budgeting approach works well 38% 52% 41% 51% 35% 27% 14% 24% 47% 10% 6% 26% 58% 47% 61% 12% 17% 17% 17% 14% 13% 9% 44% 35% 9% 13% 21% 32% 27% 15% 16% ATTITUDES & BEHAVIOURS GENDER 46% 54% = 48% = 52% HIGHEST EDUCATION Graduate A Level GCSE/Vocational None WORKING STATUS Employed Full-time Employed Part-time Self-employed Not Working (other) In Education Unemployed Retired 37% 31% 27% 4% 58% 14% 6% 7% 8% 4% 2% 30% 25% 28% 15% 42% 11% 5% 9% 6% 3% 23% Keeping up with bills and commitments Without difficulty Struggle Having problems Has a financial goal 60% 49% 49% 43% 8% 59% 36% 5% FINANCIAL ATTRIBUTES HOUSEHOLD INCOME 32K Average = 30K k 11.5k- 20k 20k- 30k 30k- 50k 50k+ HOUSEHOLD SAVINGS Money management method: Branch Website Phone App SMS Post 20% 17% 19% 29% 15% Savings : Income Ratio 1+ Months Income 3+ Months Income 40% CREDIT CHANNEL Have Savings 75% 75% Median Savings Value % 25% Uses credit/ store card Of these: Minimum payment Revolves balance 24% 26% 65% 55% 4% 5% 34% 22% 9% 6% 26% 34% 1.0K 54% 25% 20% 19% 23% 13% 34% 24% 17% 30% 53% 20% BENEFITS Unemployment Income support Sickness & disability Pension (any type) Child benefit Tax credits PROTECTION Health Insurance 25% Life Insurance Policy Internet usage in a week <6 hours 43% Home Contents Insurance LOANS 14% 10% 11% 7% 60% 4% 3% 4% 2% 31% 15% 5% 2% 6% 14% 17% 10% 18% 38% 66% Has personal loan Used alternative loan Alternative loan includes: payday loan, rent to own, guarantor loan, home collected credit, pawn broker loan & logbook loan. 20+ hours 37% 46% 26% 23% PENSIONS In pension scheme 39% DEBT 11% 14% 21% 53% 41% 10% 11% 17% Debt : Income Ratio 41% 24% 30% 18% Have a smartphone 73% 57% (Working age people) Debts are a heavy burden In arrears Over indebted (either of the above) 48% Think it is very important to put aside money for retirement Fallen behind on, or missed, any payments for credit commitments or domestic bills for 3 out of the last 6 months. 1+ Months Income 3+ Months Income

18 Thank you We look forward to continuing to work with you. 18

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