nudge theory and rent arrears - financial health exchange · nudge and rent arrears? get to the...
TRANSCRIPT
WHAT IS A NUDGE?
WHAT’S IN A WORD? CHEAT VS CHEATER
THE CLASSIC NUDGE?
NUDGE IN GOVERNMENT When citizens were told that most people pay their tax on time, payment rates significantly increased.
£210m of revenue brought forward in 2012/13 alone.
NUDGE AND RENT ARREARS?
NUDGE AND RENT ARREARS? PAYMENT RATES
63%
72%*** 71%***
0%
10%
20%
30%
40%
50%
60%
70%
80%
Control Fear Norm
Proportion of tenants that made a payment: entire trial
Including 1 extra message in arrears communications resulted in 9% increase in payment rates.
Control New letter & Env 1 New Letter & Env 2
NUDGE AND RENT ARREARS? SOCIAL NORMS
Reframing Letter 1 led to a 12% increase in payments. 44%
48%
56%** 52%
0%
10%
20%
30%
40%
50%
60%
Control Existing-Yellow Invoice-Yellow Chat-Yellow
Proportion of tenants who made a payment: entire trial
Control Int 1 Int 2 Int 3
NUDGE AND RENT ARREARS? A SIMPLE THANK YOU
Thank tenants for keeping up repayment agreements resulted in 71% of them further increasing the amount they paid to reduce their debt,
52%
38%
71%*
0%
10%
20%
30%
40%
50%
60%
70%
80%
Control Card Text
Proportion of tenants who overpaid against 'amount due'
NUDGE AND RENT ARREARS? A HANDWRITTEN ENVELOPE
Changes to an envelope increased revenue by 46%
£83.00
£121.00
£85.00
£0.00
£20.00
£40.00
£60.00
£80.00
£100.00
£120.00
£140.00
Average payments per tenant within 7 days of intervention
Control New Envelope Old Envelope
NUDGE AND RENT ARREARS? GET TO THE POINT!
Simplifying the layout of a letter using basic information design resulted 24% higher tenant engagement. 38%
54%***
62%***
0%
10%
20%
30%
40%
50%
60%
70%
Control Positive Negative
Proportion of tenants that made contact following intervention
Control New letter 1 New Letter 2
NUDGE AND RENT ARREARS? BUT… CAN’T PAY / WON’T PAY?
“” Most people nowadays just don’t have enough money. For the last 6 months, I’ve been living of £140 a month. And that’s for everything. Everyone’s struggling these days. It’s a small number who are swinging it. Most of us are just struggling to make ends meet. When you’re on a very low income—on £30/40 a week whilst trying to raise two kids and trying to pay the bills [it’s tough].
“” Most people who fall behind with their rent… it’s out of their control It’s all down to circumstances Circumstances that this government have brought in. The majority of it is because of the circumstances. I don’t think it’s because people don’t want to pay their rent.
RELEVANT? ETHICAL? COUNTER PRODUCTIVE?
EVIDENCE-BASED BEHAVIOUR CHANGE TARGET AND TAILOR
EVIDENCE-BASED BEHAVIOUR CHANGE REVENUE VS COST-TO-RECOVER
59%
24%
7%1% 3% 3% 2% 0% 1%
0
2000
4000
6000
8000
10000
12000
14000
1 2 3 4 5 6 7 8 to 13 14
Number of arrears events by terminal levelESCALATION STAGES Only 25% of escalations triggered by tenant behaviour: • HB payments • Unusual
Debits • System Errors
EVIDENCE-BASED BEHAVIOUR CHANGE REVENUE VS COST-TO-RECOVER
£11 £18£69
£111£167 £188
£327 £341
£676
£0
£200
£400
£600
£800
1 2 3 4 5 6 7 8 to 13 14Arrears event level
Average cost per eventStage 1 alone cost the organisation a quarter of a million pounds!
EVIDENCE-BASED BEHAVIOUR CHANGE
73% 71% 72% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Control Personal Post-it Stop
Proportion of tenants that made payment: entire trial
Control Intervention 1 Intervention 2 Stop
DO WHAT WORKS!
EVIDENCE-BASED BEHAVIOUR CHANGE
BEHAVIOURAL SCIENCE
PROCESS ANALYSIS
QUALITATIVE INSIGHT
INTERVENTION DESIGN
RIGOROUS EVALUATION
TENANT
PROFILING
THANKS FOR LISTENING!
DO WHAT WORKS!