1. Context
2. The study
3. Key findings
4. Points to consider

Context

The study built on Measuring Financial Capability (Citizens Advice, 2017), which offers a meaningful framework for measuring and tracking clients’ money skills across a range of domains and allows understanding of inter-relations between them. “Money skills” is Citizens Advice’s term for financial capability and reflects a focus on concepts that are meaningful to the client base. The report aims to help improve services to clients while contributing to the wider evidence base.

The study

1074 Citizens Advice clients across England and Wales completed paper surveys while waiting for face-to-face advice on a range of issues. Citizens Advice clients are representative of the population of England and Wales across age, gender and ethnicity but are five times more likely to have a low income; the sample was in turn representative of Citizens Advice clients (92-98% confidence level). The survey gathered demographic, money and numeracy skills data and open-ended responses to determine clients’ levels of knowledge, action and mindset on the following money skills areas:

• keeping track of money (core)
• having enough money to live (core)
• controlled spending (core)
• planning ahead with money
• looking for the best deals
• staying informed about money
• overall confidence

Key findings

• • 63% needed help in at least one area and about 11% needed support in all areas. The evidence suggested thatUsing Spearman’s test, there were significant correlationsconnections between scores across all money skills areas (R>0.5).
  • Clients tended to score better on core skills, with 58% keeping adequate track of money and knowing how to control spending, although about 1 in 5 of the first group reported low levels of knowledge and a similar proportion of the second group felt that they could act on their knowledge better.
  • The main areas needing support were in being confident about taking action (49%), knowing about their money services (42%) and acting to stay informed about this (42%). Overall, respondents tended to score themselves lower for confidence than for knowledge and action.
  • There can be large differences between what people know and how they act, and fixed and changing features can affect money skills. This highlights the importance of being aware of and responsive to individual circumstances.
• • Demographics: Age and housing tenure had a strong relationship with overall money skills (with those over 50 and homeowners tending to score higher); and gender, disability/long-term health issues, ethnicity, household type (that is, having dependants) and household income had a moderate relationship. It is important to note that different situations are often related to different types of skill: for instance, the over 50s scored highly overall, but lower than others on knowledge and action on shopping around and keeping track knowledge.
  • Related needs: Digital skills and literacy (in any language) had a strong relationship; English as a second language and numeracy had a moderate relationship (although the study is less confident about numeracy results).
  • Situational factors: Being affected by a mental health condition or debt had a strong, statistically significant negative relationship (p<0.01), while current health issues also had a strong negative relationship; being affected by physical illness or a significant decrease in income had a moderate negative relationship. There was no apparent relationship regarding having moved house or losing a job.
• • Difficulties: coping with money matters in the face of demands, having enough money to live on, and overall money management skills.
  • Support needs: Overall money management and skills and planning for the future, getting enough money to live on, dealing with paperwork, and dealing with money-related issues, including debt, benefits and health.

Points to consider

• • The report does not include confidence levels for most reported results.
  • There is no statistical information given for the claim that the client base is representative of the population of England and Wales.
  • There were some problems in getting subjects to complete the numeracy scanner, so those results are less confident.
• • The study is relevant to those giving and planning advice and support.
• • The study is aligned with the UK Financial Capability Strategy.
  • Findings are broadly generalisable across England and Wales.

Full report

Understanding money skills - full report