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.
This report presents the findings of analysis of the 2018 Financial Capability Survey of UK Adults, commissioned by Money Advice Service. It explores the building blocks of financial capability, updating and extending similar analysis conducted in 2015..This was based on extensive desk research to define and measure a set of financial capability components, which were used to build a conceptual framework for financial capability and wellbeing. The purpose of the 2018 survey was to capture adults’ financial capability levels, replicating the 2015 components as far as possible. (A minority of components for the 2018 survey were refined, and a small number of additional components added, to ‘plug gaps’ in the 2015 survey).
The study reviews the findings of the 2018 financial capability survey, focused on adults of working age and retirement age. The research scores 21 components of adult financial capability across the UK, on a scale from 0 to 10 (from ‘not at all capable’ to ‘highly capable’). The components are:
The report analyses adults’ levels of financial capability and financial wellbeing for each of the components. The report considers differences in average scores by life-stage, income level and financial resilience. The analysis also explores the determinants of financial wellbeing outcomes and financially capable behaviours, including:
The report analyses survey data from working age adults and retired people. Principal components analysis was used to measure average capability scores, and multiple regression analysis was conducted to identify the financial capability drivers for each component. The data was weighted to be representative of all adults in the United Kingdom, by age, gender and geographical region. 5,974 adults (aged 18 and over), including 4,668 adults of working age (ages 18 to 64 inclusive) and 1,306 adults of retirement age (defined as aged 65 and over) participated in the survey.
Levels of financial capability and wellbeing:
Determinants of financial capability and wellbeing:
Methodological limitations: Although the 2015 and 2018 scores are not directly comparable, the 2015 survey components were reproduced in 2018 (using the same or very similar survey questions). This replication process increases the validity of the components used. This approach provides a good basis for measuring financial capability and financial wellbeing in the future.
Relevance: The findings provide useful insights that can inform the development of interventions and targeted support in improving financial capability among working-age and retired people.