1. 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

2. 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

3. 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

4. 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)

5. Partnerships Saver Plus Management Committee (ANZ and the Brotherhood of St Laurence) Project Manager Brotherhood of St Laurence Relationship Manager The Benevolent Society Relationship Manager Berry Street Victoria Relationship Manager Participants Primary Partners Research and evaluation RMI T The Smith Family Relationship Manage r Participants Implementation Partners

6. SP Design Features - Pilot Case management –Recruitment –Support –Facilitate education Financial education 2 for 1 matching (limit $1000) Restricted goal: Secondary School education costs

7. Eligibility Criteria Health Care Card Holders ($599 - $741p/week + $34 each child) Child in secondary school Some paid employment Demonstrated capacity to save

8. Saver Plus locations & numbers Four locations: –Frankston, Victoria 177 –Shepparton, Victoria 125 –Campbelltown, NSW 49 –Brisbane / Gold Coast101 –Total452* *(nos. of commenced, 408 completed)

9. 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

10. 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

11. Participant Numbers Total 452 Analysis conducted on 399 participants 44 withdrew 11 did not want to take part in the research

12. 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

13. 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%)

14. 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

15. Motivations to Join Saver Plus Opportunity to get matched funds Opportunity to get financial literacy training Support and counselling Learn how to save 80.2% 3.95% 0.79% 12.25%

16. Savings and money management prior to SP Prior savings levels Less than $5024.2% $50 – 19924.56% $200 – 59919.57% $600 – 99910.32% $1000 – 299912.81% $3000 – 49994.27% $5000 +4.27%

17. Past saving and spending behaviour Past Savings Behaviour Tried to save when possible52.79% Saved only for specific item25.28% No point trying to save19.33% Saving isn’t important2.6% Past Spending Behaviour Spend all income27.51% Feel out of control with debt13.43% Could manage if lost income for a short period of time 64.44% Have problems setting money aside for major financial outlays 40.52% Have worked out how much is needed for retirement 7.43% Have long-term financial plan15.24%

18. Financial products used SolelyJointlyBothDo not have Ordinary bank account with a bank, building society or credit union 72.01%15.67%8.21% 4.10% Vehicle insurance 60.07%20.52%4.10% 15.30% Superannuation 68.28%2.61%5.22% 23.88% House or contents insurance 45.90%23.51%3.36% 27.24% A home mortgage19.40%19.78%1.87%58.96% A personal loan22.39%6.72%0.75%70.15% Private health insurance8.21%9.33%0.75%81.72% Shares12.69%3.73%1.49%82.09% Managed investments other than superannuation 11.19%2.61%1.49%84.70% A lease or hire purchase agreement 5.22% 1.12%88.43% Term deposits8.21%1.87%0.37%89.55% An investment property1.49%2.99%0.37%95.15%

19. Financial literacy factors FactorEntire sample score Day-to-day banking14.03 Convenience banking8.90 Investment and credit9.56 Cards10.59

20. Levels of success 95% of participants met or exceeded their goals

21. Savings goals Average saving goal Average balance saved –Monthly balance Participants aimed to save the maximum of $1000 $964 $1,214 $125 90.1%

22. 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

23. Patterns of saving behaviour & average final balance

24. 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

25. Difficulties in saving Around 27% had difficulties in saving during the program –Unexpected bills –Reduced hours of employment –Major illness

26. 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’

27. 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

28. Saving 3 months Post-Saver Plus 85% still saving –44% same amount –20% more –34% less Most common amount $76 – 100 per month

29. 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 99% reported a positive experience in the program

30. 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

31. 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

32. 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 –Incentive (co-contribution arrangements)

33. 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