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Evidence review: Savings and financial health

Examining the evidence between informal and formal savings and key financial health indicators.


This meta-study from our Mastercard Foundation Savings Learning Lab project examines existing evidence on savings in light of the emerging concept of financial health.

It identifies findings from the savings literature that relate to the key elements used to define financial health and explores whether the findings indicate how savings contribute to financial health. It also identifies elements within the realms of financial health and savings that have been relatively well studied and other elements that remain underexplored.

Researchers have been studying savings for many years, while financial health has only recently been studied outside a few high-income countries. In the wider evidence base on savings, there is a body of work that does not use the financial health lens but does assess the link between savings and key financial health outcomes, such as the ability to smooth consumption, resilience, and financial empowerment.

Through re-analysing and synthesising lessons from these studies using the financial health lens, this report aims to connect a deep body of knowledge on savings with the new conversations on financial health.

Despite increases in financial access and usage across the world, enormous gaps in financial health remain.

The World Bank’s Global Findex surveys in both 2014 and 2017 found that although financial inclusion (defined by account ownership) rose across the world, resilience was slightly lower in 2017 than in 2014 in all regions, excluding high-income countries. In Kenya’s FinAccess surveys, the number of ‘financially healthy’ adults – defined using the first three of the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development’s (UNSGSA’s) four elements of financial health – dropped from 39% in 2016 to 22% in 2019, even though access and usage of financial services increased. The Findex also found that savings in accounts did not budge: the newly included do not necessarily use their accounts to save. These findings set the stage for examining how savings relate to financial health.

The objective of this paper is to examine the evidence base on the link between savings (both formal and informal) and key financial health indicators.

The learning questions (LQs) we posed are:

  1. What does the literature on savings tell us about how savings contribute to financial health?
  2. Does the mode of savings matter for financial health (savings groups, in-kind savings, bank accounts, etc.)?
  3. What links between savings and financial health have been most thoroughly substantiated, and where are there gaps?
  4. Does using a financial health framework provide new insights into savings?

We developed a conceptual framework that sorts specific situations and outcomes according to one or more of the four main elements of financial health, and further breaks these into sub-elements based on subcategories that appear in the literature on measuring financial health. The subcategorization allows us to match results from studies on savings research that may mention only one aspect of the broader financial health concept.

In addition, as we reviewed, we identified several other key considerations mentioned in the research that could impact financial health through the use of savings.

This paper is aimed at practitioners, donors and researchers working on savings and/or financial health in the broader financial inclusion context.

Read more on our work with the Mastercard Foundation Savings Learning Lab