Description of the programme:

As part of its work to explore how to help claimants manage their benefit payments (particularly those who are vulnerable or need help with budgeting), DWP worked with Kent County Council to deliver a 'proof of concept' small-scale test in Kent in 2015. The aim of the test was to explore the viability of using prepaid card systems to make benefit payments to claimants, and identify:

• The key challenges and opportunities for using prepaid cards to make benefits payments
• How claimants use and experience the cards
• Whether it was feasible to conduct a formal trial of using prepaid cards to support vulnerable clients

The intervention ran in Kent for six months. Up to 150 claimants could access the prepaid card system, but just 72 had volunteered by the end of the test period; 55 activated their card and five dropped out.

The study:

The Department for Work and Pensions (DWP) commissioned a team at the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University to conduct a process evaluation. The evaluation aimed to:

• Help determine the feasibility of paying benefits via prepaid cards
• Identify the key challenges and opportunities for using prepaid cards
• Take the learning from the test forward and make recommendations for changes that would be needed in order to scale up or roll out the test

The evaluation sought to address these aims through a qualitative methodology. It involved:

• Qualitative, semi-structured interviews with 20 of the claimants having their benefit paid onto a prepaid card
• Short-structured interviews with seven ‘non-participants’
• Face-to-face interviews with two senior managers at Kent County Council
• Face-to-face interviews with 14 individuals from the contracted support providers
• Telephone interviews with officers in four other local authorities

Key findings:

• There was low take-up of the prepaid card test. To some extent, this was due to the short duration of the test meaning that support workers tended to focus on people without bank accounts. In addition, some delayed communication to support provider staff about what would happen once the test finished, also reduced take-up, as staff did not feel confident to advertise the study.

• Overall, the card technology appeared to be effective. Other local authorities, using the prepaid cards for different purposes, confirmed that the cards were simple to implement and not too expensive. There were some ‘teething’ issues with the cards, but stakeholders did not view these to be fundamental barriers to the use of the cards.

• Generally, stakeholders and participants were positive about the prepaid card. Participants felt confident that their money had been stored securely and could be retrieved easily.
• Participants used their cards in different ways. Some just used it as a depository, and withdrew their benefit once it was paid onto the card. Others used it like a bank account, set up Direct Debits, made card purchases, and checked their balance and expenditure online.

• The study found that assisting clients and providing support about the prepaid card did generate additional work for support providers, but they believed that there were positive outcomes resulting from the extra time investment. However, the evaluation found that the support was integral to the success of the prepaid card, and this would need to be considered when scaling up/rolling out the test.

• The study found that the prepaid cards provided a ‘safe’ financial environment for people in debt. It also helped provide greater financial safety for participants who had been exploited by previous or current partners or peers.
• Participants and support workers thought that the use of the prepaid cards could promote financial independence, as it helped participants have more control over, and ownership of, their finances.
• There was also evidence of there being prestige, status and a sense of social inclusion associated with having a prepaid card.

• The helpline was sometimes inadequate, with some participants reporting that they struggled to get through to it.
• There could have been more clarity about how the process would work for provider organisations. Support providers were not always clear about all of the features of the card, and some participants only had a partial understanding of the features of the prepaid card and the other support provided. Additionally, some participants were uncertain about what would happen at the end of the test.

Points to consider:

• This study is relevant to any stakeholders interested in utilising a prepaid card scheme among benefit claimants, or supporting people to use a prepaid card.

• The researchers only interviewed 20 participants so while the findings are useful and indicative of trends and behaviours, they cannot be generalised to the wider population.