There is strong evidence that levels of financial capability can make a difference to how young people manage their money in the short-term. Conversely, the evidence of the impact financial capability has on more long-term social mobility is less compelling. Research has shown that young people, particularly those from low-income backgrounds, are facing an uncertain financial future at a time when there is a need for individuals to take more responsibility for their financial decision-making. However, there are a number of innovative programmes that suggest improved financial skills help young people to progress more positively through young adulthood.
This 2019 report from the National Youth Agency (NYA) considers the notion that better financial capability can advance the social mobility of disadvantaged young people, by helping to raise awareness of the implications of financial decisions in the short, medium and long-term. The report contains a brief review of the relevant literature, before suggesting the steps that can be taken to strengthen the support that is available to young people.
- The first step suggested in the report is to continue the work that goes on in encouraging young people to achieve as much as possible at school, as well as supporting employers (with Natwest given as an example) who provide financial support for young members of staff.
- The authors state that more can be done to reach young people who are not in school, those who are at the greatest risk of dropping out of education or training, and those who face important life events that can make a difference to their future prospects. These are people identified as particularly vulnerable in previous MAS research.
- The report also states that it is necessary to encourage a broader range of support, away from just schools, including access to initiatives such as the Barclays Lifeskills outreach programme that supported young men in ‘social mobility opportunity areas’.
- NYA also state that it is necessary to train more youth workers, family support professionals and social workers who can help young people at critical moments in their lives.
- NYA cite the success of their ‘My Money Now’ programme, which confirmed that the use of youth worker peer educators rather than ‘professionals’ increases engagement among young adults, as there is less ‘social distance’.
- The My Money Now evaluation was also well-received among those aged 20+ on apprenticeships, confirming that financial capability information and education is best delivered to different cohorts using varied methods. This could be a key finding, given the government’s intention to create 3 million more apprenticeships in the immediate future.
- The report also states that we shouldn’t lose sight of the huge effort that some young people make just to be able to remain in education and training. In some ways they see this as a useful measure of social mobility as it helps researchers understand young people’s challenges at the beginning of their ‘journey’ rather than the end.
- Providing support for young people to move forward in their lives can be expensive, time-consuming and requires significant skill to engage the young people in the first place, particularly the most vulnerable and those with the most complex needs.
- The final step states that we can’t ignore poverty, and this needs to be acknowledged explicitly when designing programmes for young people to support their financial capability and social mobility.
- The report concludes by stating that if young people feel more in control of their finances (are financially capable), this has huge benefits in terms of mental health and self-confidence, as well as the associated positive changes in social mobility.
Points to consider:
Methodological strengths and limitations:
- There are very few details regarding the methodological process behind this report.
- This qualitative report is based on a review of previous research and observations and offers some subjective (though considered) next steps. While these are grounded in theory and previous experience, the findings are not necessarily representative of all groups of young people in the UK.
- This report is relevant to all researchers with an interest in the links between financial capability and social mobility in young people, and the related outcomes as they transition into adulthood.
- This research can be treated as a good indicator of the links between financial capability and social mobility among young people in the UK, though more robust evidence may be needed to further support the next steps suggested in this report.