Saving money, insuring the future

1. Description of the programme
2. The study
3. What are the outcomes?
4. Key findings
5. Points to consider

• Description of the programme
• The study
• What are the outcomes?
• Key findings
• Points to consider
• Full report

Description of the programme

This study reviews the experience of social housing tenants of Derwentside Homes, County Durham, who took part in a trial scheme called Save and Insure. The research was funded by the Royal Bank of Scotland Group as one of a range of projects which aimed to increase financial inclusion.

Its goals were to:

• Increase membership of the credit union
• Encourage savings
• Offer the opportunity to trial home contents insurance;
• And increase access to affordable credit.

Participants were encouraged to join a credit union and save £10 per month for a six month period. They were offered:

• An incentive of £20 for those who achieved the saving target
• Low-cost loans after saving with the credit union for ten weeks
• Tenants received six months’ free home contents insurance through RSA (£40 value) with the hope that at least 50% of tenants would continue after the free period was over.

The study

This study is of social housing tenants of Derwentside Homes, County Durham who took part in a trial scheme called Save and Insure. Evaluation methods included a focus group with participants and a survey of participants five months after the scheme started to explore reactions to the scheme. This is supported by Management Information provided by the partners of the scheme, capturing data about tenant take up and use of the scheme’s elements during the trial period. The research is funded by the Royal Bank of Scotland Group (as one of a range of projects into increasing financial inclusion).

What are the outcomes?

• Number of tenants that joined the credit union
• Proportion of tenants who took out the free home contents insurance
• Proportion of tenants who took out loans
• Proportion who saved enough every month to receive the incentive.

Key findings

• Membership: The aim was for 500 people to take part, but only 195 did so. Of these 29% cancelled their accounts. The person signing people up for the trial suggested that scheme advertising and promotion could be improved in future.
• Gender: The proportion of men who joined the trial was slightly higher than that of existing credit union members (39% of trial participants vs. 28% of credit union members).
• Age: T hose who joined the trial were younger (average age 51 vs. 57 among credit union members).
• Home insurance take-up: Home insurance was signed up to by 68% of participants (the remainder had insurance or were not eligible). Focus group participants reported negative perceptions of home insurance providers which, along with lack of money, can impact on willingness to insure.
• Savings behaviour: 52% of those in the trial saved the specified amount of £10 per month for the six month period and received the incentive of £20. The post-trial survey shows 76% of members had not been saving a set amount per week or month before the scheme. Focus group participants reported that the ease of depositing their money, the relative difficulty of withdrawals and the incentive of an additional £20 helped to encourage saving.
• Loans: 17% of participants took out loans with the credit union during the trial. Focus group participants felt the affordability and transparency of loans greatly exceeded those of loans from other providers available to them.

Points to consider

• Relevance:
  • This study will be relevant to those interested in increasing saving behaviour and uptake of home contents insurance, and to those interested in the delivery of local partnership schemes involving housing associations and credit unions.
• Methodological limitations:
  • 195 people took part in Save and Insure but 29% cancelled their accounts by or at the trial end, leaving 138 individuals. 24% of these completed the post-programme questionnaire, however it is unclear whether this is 24% of 195 or 138 people.
  • The qualitative research element (focus group) is based on a single session, attended by 12 tenants with 3 representatives from scheme partners.
  • The evaluation framework required monthly feedback from partners to provide key metrics against which the trial would be measured. There were issues obtaining this feedback. As a result only some intended metrics are covered in the report.
  • Of particular note, there is no data on behaviour after the trial ended (from March 2011), although the evaluation framework shows that this had been intended. There is therefore no information on longer-term behaviour: whether the participants continued saving, to have home insurance or to be credit union members.
  • There is little data presented in the report from before the start of the trial. For example, savings behaviour was not captured pre-trial, but asked retrospectively. For those who were already saving, it is also not known if the trial made them save more or less than previously.

Full report

Saving money, insuring the future - full report