Having goals, personal support and a strong emotional motivator are vital for successful savings amongst low-income earners according to new research.
Launched by the Australian Government Minister for Financial Services, the Hon Chris Bowen MP, the research examined the success of the Saver Plus matched savings and financial education program, developed in partnership with the Brotherhood of St Laurence.
Saver Plus provides participants with financial education, personal coaching and matched funds from ANZ for every dollar saved. More than 5,000 families across Australia have participated in Saver Plus since 2003 with more than 70 per cent continuing saving at the same rate or more 2-3 years after completing the program.
The research revealed strong motivators are needed to encourage people to save money and overcome a preference for the ‘immediate’. Goals with an emotional driver, like saving for a child’s education, offer a powerful incentive for people to persevere and succeed.
Monash University Associate Dean, Professor Robert Brooks, who worked as an expert adviser on the research project, said the research findings demonstrate the complexity of human financial decision-making.
“Examining the behaviour and attitudes of people participating in Saver Plus has enabled us to better understand the importance of several key elements of the program, such as the offer of support and education, as well as strong financial and emotional incentives,” Professor Brooks said.
The research findings also recommended potential enhancements to further improve the success of Saver Plus including the use of automated direct debit to limit the likelihood of participants dropping out.
Deputy Chief Executive Officer Graham Hodges confirmed our long term commitment to helping more low income earners learn to save.
“Here, as in the US and the UK, structured interventions to encourage saving are becoming accepted as a means to help improve the wellbeing of low income people. Last month, the Prime Minister announced Government support of A$13.5 million to expand the Saver Plus program, making it available in 60 sites nationally and assisting an additional 7,600 people by 2011,” he said.
The Saver Plus expansion will be overseen by ANZ and BSL in partnership with Berry Street, The Benevolent Society and The Smith Family. The program will also be delivered by Jewish Care Victoria, Loddon Mallee Housing Services, Bethany Community Support, Ballarat Group Training and Anglicare SA.
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