Context

Understanding what works to build the financial capabilities children and young people aged under 25 is key to informing the delivery of effective financial education, whether at home, in educational settings or in the wider community. A review undertaken for the Money and Pensions Service (MaPS) in 2018 provided an Evidence Map of the evidence available at that time of what works in building children and young people’s financial capabilities, and the gaps in the evidence base at that time.

MaPS commissioned this review to update the 2018 evidence and support its understanding of recently published evidence in this area. It was intended to help MaPS promote ‘what works’ to funders and providers of financial education across the UK and support progress towards the Financial Foundations national goal of the UK Financial Wellbeing Strategy. Its purpose was also to identify gaps in the evidence base which MaPS and others could work towards filling.

The study

This review of evidence was undertaken by Edinburgh University’s Business School to improve MaPS’s understanding of recently published evidence in the area of financial capability in children and young people. It had a particular focus on financial education delivered in the home, in educational settings and in the wider community.

The review methodically gathered, analysed and evaluated over 300 relevant pieces of evidence from the academic and grey literature, mostly from the UK.

The main outcome of this review is an updated and extended Evidence Map from the 2018 review, drawn from 51 new studies of tested interventions. The Evidence Map provides a comprehensive, visual synthesis of the scope, strength and consistency of the evidence mapped to the four outcome areas defined by MaPS’s Children & Young People Outcomes Framework (Ability, Mindset, Connection and Behaviour).

Insight provided by the remaining studies provides further context, including promising practice examples in addition to those which showed more conclusive evidence of impact, and supports the identification of 11 themes in the available evidence base and key gaps.

Key findings

11 themes were identified from the evidence base of financial education interventions for children and young people:

1. Train-the-trainer approaches are effective for building financial capability
2. Workshops and classroom formats enhance ability and mindset
3. Experiential or active learning enhances skill development and behaviour change
4. Parental involvement helps influence mindset, connection and behaviour
5. Appropriate timing and context can amplify effectiveness and influence behaviour
6. Cognitive factors are important for improving downstream financial behaviours
7. Interventions aimed at a young age can help enhance outcomes
8. Financial education affects both knowledge and behaviour, which are resistant to decay in the medium term
9. Some mainstream, particularly digital, interventions are still not well evidenced
10. Analysis of return-on-investment is growing, but still lacking
11. Developing the financial capability of vulnerable children and young people requires tailored and flexible approaches

Key ingredients of successful interventions include:

• linking them to broader frameworks or curricula
• delivery by trusted and appropriately skilled practitioners
• tailoring relevant to the development and needs of young people
• incorporating experiential learning, involving parents and families
• designing programmes with outcomes in mind.

Prime opportunities for scaling up interventions are train-the-trainer approaches, supporting parents, experiential learning and analysis of return on investment.

Key gaps in the evidence base include longitudinal insights, effectiveness of digital apps, the insights of very young children, and the role of – and impacts of interventions – on cognitive biases.

Points to consider

Methodological strengths/weaknesses:

• The authors describe a comprehensive and rigorous approach to searching, screening, selecting and evaluating the relevant literature, in keeping with the rapid evidence review approach. This suggests that the findings of the review are robust and reliable given the evidence base at the time it was conducted.
• Note that, although this is a review of the UK landscape of financial education interventions, some international literature is included.

Applicability:

• The report should be of interest to funders, policymakers and other stakeholders locally and nationally who wish to support financial education interventions for the benefit of children and young people’s financial capability.
• It should also be of practical guidance to organisations and other services which are designing, developing or delivering such interventions.

Relevance:

• The findings from the review are highly relevant in the context of the Financial Foundations national goal set out in the Money and Pensions Service’s Financial Wellbeing Strategy for the UK, 2021.
• The review is relevant more broadly given the increasing ‘financialisation of daily life’ for individuals and households, recognition of the importance of financial capability in children in young people, and the changing landscape of financial education provision given its own expansion and the rapidly changing digital environment.

Generalisability:

• The findings are likely to generalise to other, similar markets, particularly given the focus on the quality of the evidence included in the review and the incorporation of evidence from other markets which tends to corroborate and extend learning from the UK evidence base.