Encouraging savings, rewarding effort Saver Plus: Encouraging Savings and increasing financial capabilities among low-income families Roslyn Russell, Sandra Mihajilo, Aruna Nair and Robert Brooks
This presentation….. • Provides an overview of the 2005 evaluation results of Saver Plus • Highlights the key success factors of the program • Gives current directions of Saver Plus
Saver Plus Saver Plus is a program designed to help families on low income improve their levels of financial literacy, develop a savings habit and build assets for educational purposes
Saver Plus • Initiative of ANZ Banking Corporation and Brotherhood of St Laurence • Delivered through partnerships with four community organisations: – Brotherhood of St Laurence (Victoria) – Benevolent Society (NSW) – Berry Street Victoria (Victoria) – The Smith Family (QLD)
Partnerships Saver Plus Management Committee (ANZ and the Brotherhood of St Laurence) Primary Research Partners and evaluation RMIT Project Manager Brotherhood of St Laurence Brotherhood The Berry Street The Smith of St Benevolent Victoria Family Laurence Society Relationship Relationship Relationship Relationship Manager Manager Manager Manager Implementation Partners Participants Participants Participants Participants
SP Design Features - Pilot • Case management – Recruitment – Support – Facilitate education • Financial education • 2 for 1 matching (limit $1000) • Restricted goal: Secondary School education costs
Eligibility Criteria • Health Care Card Holders ($599 - $741p/week + $34 each child) • Child in secondary school • Some paid employment • Demonstrated capacity to save
Saver Plus locations & numbers • Four locations: –Frankston, Victoria 177 –Shepparton, Victoria 125 –Campbelltown, NSW 49 –Brisbane / Gold Coast 101 –Total 452* *(nos. of commenced, 408 completed)
Evaluation Aims • Degree of success in meeting savings goals • Levels of improvement in financial capabilities • Identify enabling / inhibiting factors for success • Identify other flow-on effects from participating in the program
Research process • Questionnaire at commencement • Questionnaire before undertaking financial education • Final questionnaire • Focus groups: during program and three months after completion • Interviews with staff • Banking data
Participant Numbers • Total 452 • Analysis conducted on 399 participants • 44 withdrew • 11 did not want to take part in the research
Demographics • Average age 42 years • 97.8% are female • 32.56% couples • 67.44% sole parents • On average participants have 2.3 dependent children • Average age of the child is 12 years
Language, ethnicity and education levels • 94.2% speak English as their first language • 2.14% identify as Aboriginal or Torres Strait Islanders • Most common education level: partial completion of school education followed by a subsequent qualification from TAFE / other (44.17%)
Employment & Income • Employment – Full-time 11% – Part-time 41% – Casual 38% – Not employed (partner working) 11% • Main sources of household income – Paid employment 43.68% – Government benefits 56.23% – Average family income (after tax) $659.77 p/week
Motivations to Join Saver Plus • Opportunity to get 80.2% matched funds • Opportunity to get 3.95% financial literacy training • Support and counselling 0.79% • Learn how to save 12.25%
Savings and money management prior to SP Prior savings levels Less than $50 24.2% $50 – 199 24.56% $200 – 599 19.57% $600 – 999 10.32% $1000 – 2999 12.81% $3000 – 4999 4.27% $5000 + 4.27%
Past saving and spending behaviour Past Savings Behaviour Tried to save when possible 52.79% Saved only for specific item 25.28% No point trying to save 19.33% Saving isn’t important 2.6% Past Spending Behaviour Spend all income 27.51% Feel out of control with debt 13.43% Could manage if lost income for a 64.44% short period of time Have problems setting money aside 40.52% for major financial outlays Have worked out how much is 7.43% needed for retirement Have long-term financial plan 15.24%
Financial products used Solely Jointly Both Do not have 72.01% 15.67% 8.21% Ordinary bank account with 4.10% a bank, building society or credit union 60.07% 20.52% 4.10% Vehicle insurance 15.30% 68.28% 2.61% 5.22% Superannuation 23.88% 45.90% 23.51% 3.36% House or contents 27.24% insurance A home mortgage 19.40% 19.78% 1.87% 58.96% A personal loan 22.39% 6.72% 0.75% 70.15% Private health insurance 8.21% 9.33% 0.75% 81.72% Shares 12.69% 3.73% 1.49% 82.09% Managed investments other than 11.19% 2.61% 1.49% 84.70% superannuation A lease or hire purchase 5.22% 5.22% 1.12% 88.43% agreement Term deposits 8.21% 1.87% 0.37% 89.55% An investment property 1.49% 2.99% 0.37% 95.15%
Financial literacy factors Factor Entire sample score Day-to-day banking 14.03 Convenience banking 8.90 Investment and credit 9.56 Cards 10.59
Levels of success 95% of participants met or exceeded their goals Meeting the Savings Goal - All Participants 70.00% 58.89% 60.00% 50.00% 35.57% 40.00% 30.00% 20.00% 5.54% 10.00% 0.00% Did not meet goal Met goal Exceeded goal
Savings goals • Average saving goal $964 • Average balance saved $1,214 – Monthly balance $125 • Participants aimed to save the 90.1% maximum of $1000
Saving behaviour (cont) • Those who saved more: –Earned more (equivalised weekly income ) –Single income, full-time employment –Primary income was paid, not govt –Previous savers
Patterns of saving behaviour & average final balance n % Mean Consistent - (no withdrawals, did not miss a deposit, deposits made with a standard deviation of less than $10) 0 Consistent / Variable - (no withdrawals, did not miss a deposit, deposits made with a standard deviation of more 103 34.45 $1,327.79 than $10) Withdrawer 148 49.5 $1,212.48 Sporadic – (missed 1 or more deposits) 48 16.05 $1,018.50
Enabling factors assisting saving • Using auto deductions from salary • Motivated by incentive • Knowing that education costs were going to be covered for the year • Establishing a steady habit of putting the money aside • Determined attitude to succeed
Difficulties in saving Around 27% had difficulties in saving during the program – Unexpected bills – Reduced hours of employment – Major illness
Financial education • Approximately 90% were satisfied or very satisfied • Over 80% of participants found the workshops to be useful or extremely useful – ( 3.95% were motivated to join because of the opportunity for financial education) • Benefits: – Meeting other people, forming networks and social connection – Increased confidence levels – Practical tips on saving and identifying spending leaks – Distinguishing between ‘needs’ and ‘wants’
Changes in money management behaviour • 96% of focus group participants reported an increase in their abilities to manage money better – Budgeting – Use of credit – Spending leaks – Choosing products – Establishing contingency savings fund – Learning e-banking – Longer term planning of expenses
Saving 3 months Post-Saver Plus • 85% still saving –44% same amount –20% more –34% less • Most common amount $76 – 100 per month
Effects and benefits of the program • Participants reported – A greater propensity to plan for the future – A more positive outlook on life – A greater level of confidence – A sense of achievement in reaching a goal – Increased self-esteem – A significant reduction in stress levels • 92% reported a positive experience in the program
Benefits (cont’d) • Top three benefits – Getting the matched funds 34% – Getting what we saved for 33% – Reduced stress about school costs 28% • Evidence of change in perceived benefits from when joined i.e. 80% of participants were mainly motivated by getting the matched funds when they commenced the program
Other outcomes • Developing a savings habit • Gaining confidence in handling finances • Started their children on savings programs • Positive effect of the purchase on the child’s schooling • Sharing information, establishment of networks • Established more goals
Key success factors of pilot • Holistic approach • Collaboration between ANZ and Community organisations • Dedication and commitment of staff involved • Evaluation from beginning, not an afterthought ‘ The whole is greater than the sum of its parts’ – Partnerships – Financial education component – Relationship managers – Co-contribution arrangements
Saver Plus 2006 - 2008 • New Partner : Department of Victorian Communities • Expanded to 18 sites in Vic, NSW, Qld, ACT • Eligibility criteria includes saving for adult vocational education and primary education • Goal to involve over 5000 participants
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