Advice NI is Undertaking Research on Financial Capability
Financial Capability refers to our ability to manage money well day to day, prepare for and manage life events, and deal with financial difficulties. In doing so, it also focuses on our financial skills and knowledge as well as our attitudes and motivation. So, this can include things such as minimising expenditure, increasing income, saving, having appropriate insurance cover or being able to choose financial products. The problem however, is that everyone is different, as are our circumstances. What might work for one person, may not work for another; there can be no one size fits all approach to financial capability.
The UK government has been extremely proactive in pushing the agenda to increase the financial capability of the UK, and rightly so. However, we in Northern Ireland face unique challenges which the rest of our counterparts in the UK do not; we do not have a functioning Executive; we have higher rates of ill mental health per capita; household incomes the lowest in the UK; poverty levels are the highest in the UK, and; levels of personal debt are also the highest in the UK. The outlook for the following year is also bleak, with it being reported that economic growth will be hindered throughout 2018, and that it is unlikely that real wage growth will climb into positive territory. As if this isn’t enough, it has been estimated that the Northern Ireland economy will be 2.5 – 12% worse off when we leave the EU.
What this highlights is the importance of having an effective financial capability strategy, which is not only unique to Northern Ireland, but which can also be tailored to meet the needs of individuals whose vulnerabilities alone, are a barrier to their levels of financial capability. This is what the research currently being undertaken by Advice NI hopes to achieve. Previous research undertaken by the Executive has identified that financial capability levels across Northern Ireland is low, and we aim to understand why this is the case, and what we can do about it.
We hope that by identifying the barriers faced by both advisers and their clients, we can work together with our members and the wider sector, to develop resources and tools which will allow us to break down these barriers, and ultimately increase financial capability levels across Northern Ireland. It seems that the next few years in Northern Ireland are likely to be financially turbulent, and we need to be working towards mitigating the impact of this for the citizens of Northern Ireland.
If you would like to discuss the research project further, you can email James McCann, email@example.com.