Evidence type: Insight i
Qualitative research is more exploratory, and uses a range of methods like interviews, focus groups and observation to gain a deeper understanding about specific issues - such as people’s experiences, behaviours and attitudes.
Quantitative research uses statistical or numerical analysis of survey data to answer questions about how much, how many, how often or to what extent particular characteristics are seen in a population. It is often used to look at changes over time and can identify relationships between characteristics like people’s attitudes and behaviours.
Previous research has shown that as young people approach adulthood, skills-based learning relevant to the independent financial lives they will soon be embarking on is essential. This is to enable them to enter adulthood with the skills and mindsets they need to make informed financial decisions and achieve their goals. Young people’s skills and behaviour at age 16 have been proven to be linked to their financial wellbeing in later life, and many of the indicators of vulnerability that can lead to poor financial capability as a young adult are stronger at the age of 16-17 than earlier ages.
Previous research has also shown that many young people approaching independence do not have the skills, attitudes, and behaviours to enable them to make the most of their money. For example, almost one-in-five young people have no bank account at all, and almost 6-in-10 14-17 year olds could not read a pay slip correctly. However, there remain significant gaps in our understanding regarding how financial education and building financial capability as a child or young person links to financial capability as an adult.
This 2019 report from the Money and Pensions Service (MaPS) outlines the key indicators found to have a link to the financial capability of young people who have recently transitioned into adulthood. It is based on statistical analysis of 397 people aged between 18 and 20 years old, along with their parents or carers. The young people also completed three annual surveys on their financial capability starting when they were aged between 15 and 17. This report looks at the relationship between the young person’s scores on several components of financial capability, and elements of their financial capability when they reached young adulthood..
Links between child financial capability and young adult outcomes
The report found that components of financial capability during childhood had an impact on financial capability when the young person reached adulthood.
Links between parental financial capability and young adult outcomes
The report found that the young person’s parent or carer’s behaviour and attitudes also had an impact on the young person’s financial capability when they reached adulthood.
Implications and recommendations
Methodological strengths and limitations: