With his award

With his award: Neil Stewart was runner-up for the Outstanding Business and Enterprise Impact award at the ESRC's Celebrating Impact Prize

Research by Warwick Business School’s Neil Stewart on nudges, which was part of a package saving credit card users up to £1.3 billion per year, has been recognized for its impact.

Professor Stewart was named runner-up for the Outstanding Business and Enterprise Impact award at the Economic and Social Research Council's (ESRC) Celebrating Impact Prize.

This prestigious award highlights his significant contribution to consumer financial well-being, helping around four million people escape the cycle of persistent debt thanks to his pioneering research on decision-making and debt management.

Professor Stewart's work has been instrumental in informing the Financial Conduct Authority's (FCA) new measures aimed at helping consumers gain better control over their spending, saving 3 million credit card users up to £1.3 billion per year.

Andy Lockett, Dean of Warwick Business School and Professor of Strategy and Entrepreneurship, praised Professor Stewart's achievements, and said: "Neil's research exemplifies the profound impact that academic work can have on real-world issues and underscores the vital role it plays in shaping public policy and improving societal outcomes.

“His dedication to understanding and improving consumer financial behavior has led to tangible benefits for millions of people.”

Professor Stewart’s research found the minimum payment attached to credit card statements was acting as a bad nudge – or sludge – through the anchoring bias, persuading people to pay off as little as possible each month and so keeping them in debt longer and racking up a bigger bill.

His critical insights have shaped the FCA's new policies, designed to assist credit card companies in offering more effective routes for customers to pay off their debt quicker, ultimately saving them sometimes thousands of pounds in interest charges.

These new rules not only benefit consumers by reducing their financial burdens but also promote a healthier financial ecosystem.

 

Professor Stewart said: "It is an honour to be recognised for this work. The goal has always been to make a positive difference in people's lives by helping them manage their finances more effectively. This recognition is a testament to the importance of research in driving meaningful change.

“We have a superb research environment at Warwick Business School with fantastic support that allows academics like me to delve into complex issues and develop relationships with key stakeholders like the FCA.

“And it is research like this that benefits the wider economy. Indeed, the business school and the University of Warwick generate more than £1.15 billion for the local economy.”

The new FCA rules, influenced by Professor Stewart's findings, require credit card companies to take proactive steps in assisting customers who are struggling with debt. These steps include offering tailored repayment plans and providing clearer information about the costs associated with different repayment options. By doing so, the FCA aims to empower consumers to make more informed decisions and avoid the pitfalls of high-interest debt.

ESRC’s Executive Chair, Stian Westlake, added: “The projects featured in this year’s ESRC Celebrating Impact Prize 2024 demonstrate how social science can have a real effect on peoples’ lives both in the UK and abroad.

“They encompass some of the most pressing issues of our times, helping the victims of institutional scandals and potentially showing us the way to more fulfilling working lives.

“Together, they show how social sciences can inform the public debate and change the world.”

Read Professor Stewart's Core Insights article on his award-winning research.

Find out more about our research at Warwick Business School.