Study reveals 'financial inertia'

Last Modified: 05 Jun 2008
Source: PA News

Britons' financial inertia is so great that the majority of people would not even bother picking up a free £5 note if it was offered to them, research has showed.

Representatives from financial website moneysupermarket.com walked up and down busy streets in London and Manchester on Wednesday wearing sandwich boards promising a free fiver to anyone who asked. But despite encountering more than 1,800 people, just 28 people took advantage of the offer.

Even when passers-by saw other people being given their free £5 note, it did not prompt them to go and ask for one themselves.

Overall less than 2% of people took the free money, with those in Manchester more likely to do so at 3.1%, compared with just 1.2% of people in London, and the group gave away only £140 of the £2,000 they had for the experiment.

Men were more likely to take advantage of the offer than women, with all but seven of the people who claimed their fiver being men.

The majority of people paused to read the sandwich board but then carried on walking.

Tim Moss, head of loans and debt at moneysupermarket.com, said: "This exercise reveals a fundamental inertia which is stopping people from making sensible financial decisions.This was a completely genuine, no strings attached offer.

"If more than 98% of the people who passed by couldn't be bothered to do that, it raises some interesting questions about what needs to be done to persuade people to make an effort to improve their financial position."

A survey carried out for the group found that 53% of people admitted that if they were offered a free fiver they would not bother to claim it, although the experiment suggests people are overestimating how likely they would be to act.

Among those who said they would not take up the offer, six out of 10 said they would not ask for the money because they would suspect their was a catch, while 20% said they simply would not believe the offer was real. Just over one in 10 people admitted they would feel too embarrassed to ask for the money and 3% claimed £5 was not worth the effort.

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