Tuesday 15 November 2016
Today, the Money Advice Service has announced a new, innovative way of understanding the key “building blocks” which can improve people’s ability to manage their money well.
The analysis – Measuring financial capability – identifying the building blocks highlights the behaviours which are the most important in improving people’s financial wellbeing and long-term financial security. The analysis shows that, whilst income is an important influence on financial resilience, improved financial capability has a significant role to play to help people make the most of what they have.
The behaviours that help people make the most of their money are; effective use of credit, active saving, keeping track of money, building resilience and working towards goals. To influence these behaviours, the analysis finds that improving financial confidence, financial engagement and the application of financial numeracy are critical.
David Haigh, Director of Financial Capability at the Money Advice Service said: “This ground breaking analysis helps us all understand how we can best help people make the most of their money. It shows the critical importance of focusing on influencing behaviours such as effective use of credit and active saving. This is vital when it comes to enabling organisations to better understand the needs of their clients and generate projects and interventions that will really make a difference to people’s lives.”
Today, the Money Advice Service is also launching a re-vamped financial capability “Evidence Hub”, which includes a broader range of evidence and insight. By making evidence and insight accessible and easy to understand, the Hub will support the use of evidence in the design of financial capability interventions, funding and policy - ultimately helping to shape more effective practice to tackle the low levels of financial capability across the UK.
The Hub now includes summaries of over 80 insight and evaluation reports, as well as a new ‘Thematic Review’ section that will bring together the latest findings and trends on particular topics.
A key focus of the Strategy this year has been to help organisations across the UK to raise standards in impact evaluation of financial capability programmes and bring consistency to money guidance. In May we launched our IMPACT Principles and Evaluation Toolkit to encourage and support good evidence and evaluation practice.
More than 30 organisations have now signed up to the IMPACT Principles and more than 50 organisations are using the Evaluation Toolkit. We have also co-ordinated a consortium to better understand the training needs of people who provide money guidance.
Andy Briscoe, Chairman of the Financial Capability Board comments: “I am pleased with the progress we have made in the first year since the Financial Capability Strategy was launched. Many new projects are underway and over 200 organisations are now actively engaged.
“We now have a clearer picture of the factors that influence financial capability, and this analysis will help us guide future interventions to maximise their impact on people’s lives. We have revamped the Evidence Hub to share vital evidence and insights across the sector, and we have brought greater consistency to the way money management initiatives are evaluated.
“As we move into year two of the Financial Capability Strategy we will continue to encourage and support our partner organisations to embed robust impact evaluation into their projects, and also to make the most of the evidence available. We will continue with our What Works Fund programme, always supporting new and innovative interventions that can drive up financial resilience. We have made a good start, but there is a long road ahead.”
For more information, contact Joe Cockerline or Joanna Brady at the Money Advice Service press office. Email email@example.com or call 020 7943 0593 during office hours or 07767 438 670 outside of office hours.
NOTES TO EDITORS
About the Measuring financial capability – identifying the building blocks Report
The results were generated from data sourced in 2015 for the Adult Financial Capability Survey for the UK. This was a major piece of research involving over 3,500 interviews with a representative sample of the UK population, supplemented by additional interviews in the devolved nations and amongst younger consumers aged 18-24. This research has been expanded to better understand the relationship between the components which make up financial capability including the key drivers and inhibitors.
About the money guidance training needs consortium
Fourteen leading organisations from the advice, learning & skills, youth and community sectors have come together to determine ways of meeting the resource and learning needs of frontline practitioners offering money-guidance or financial-capability support to people of all ages and from a range of situations.
Chaired by Yvonne MacDermid, CEO of Money Advice Scotland, this consortium is looking at the needs of practitioners for whom financial capability provision may be one of a number of elements within their professional practice, right through to the needs of practitioners whose primary job is providing money guidance to people who access their services.
About the What Works Fund
During the first half of the year we launched a £7 million fund to gain a better understanding of which projects and interventions work best to help people make the most of their money. We received over 400 expressions of interest for funding and we are aiming for projects to commence by January.
We will also be hosting the first ever Financial Capability Week from 14-20 November 2016. Planned in co-ordination with the Financial Capability Board, it will bring together organisations involved with helping people to make the most of their money to share insights and best practice.
About the Financial Capability Strategy for the UK
The Financial Capability Strategy was established as a ten-year strategy to address the stubbornly low levels of financial capability across the UK. The Strategy aims to bring together individuals and organisations to deliver a collaborative approach to improving levels of financial capability, as well as establishing the interventions that are proven to work and seeing that as many people as possible benefit from them. The strategy can be found at www.fincap.org.ukopens in new window.
About Financial Capability Week
Financial Capability Week is a themed week raising awareness of the importance of financial capability, what it means and the organisations involved in making a change. The purpose of the week will be to raise awareness of the importance of financial capability and relevant initiatives by organisations working in this area, highlighting key issues to policy makers and the media. It takes place from 14 - 20 November 2016.
There are hundreds of organisations in the UK who are involved in tackling low financial capability. They know the challenge we face in making sure people are prepared for financial shocks and able to achieve their financial goals. But we need to amplify these messages so that we can achieve the large-scale change needed.
About the Money Advice Service
The Money Advice Service is an independent organisation. It gives free, unbiased money guidance online at moneyadviceservice.org.uk or via free phone on 0800 138 7777. Debt advice is also provided through a variety of partners across the UK.
The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.