In 2016, the Financial Advice Market Review (FAMR) developed initial high-level financial Rules of Thumb, in areas such as ‘cleaning up’ your finances, managing borrowing, saving regularly and focussing on your pension.
The Money Advice Service (MAS) has been taking this work forward by developing a new Rule of Thumb to help young adults (18 to 24) use credit successfully. Previous MAS research shows this is a topic young adults most wished they had learned more about at school. The target audience are in the Struggling and Squeezed segments.
The objective of this research was to develop an initial Rule of Thumb that can be taken forward for further communications and user testing. PwC moderated an online forum of 26 participants aged 24 to 34 to explore what they wish they had known when first using credit. PwC then facilitated a co-development workshop consisting of MAS and industry experts to further develop ideas from the research; these were presented to a panel of four 18 to 24 year olds for their initial reactions. BMG conducted communications testing, of three variants, via an online survey of 1,072 18 to 24 year olds. The sample was representative of England, Wales, Northern Ireland and Scotland, as well as the UK as a whole. It asked how understandable, memorable, practical and relevant the rules were and how likely the respondent would be to use each one.
The proposed Rule of Thumb is:
The Cash Rule for using credit:
If you wouldn’t want to buy it with cash, don’t buy it with credit.
Download the reports here: