The Financial Capability of the UK - Money Advice Service

A major new study published by the MAS highlights that people are changing their financial behaviours and developing positive money habits to deal with their money matters, but reveals how half of UK adults struggle to keep up with up with their bills

The report, entitled The Financial Capability of the UK, is designed to reset the UK’s ‘Financial Capability’ baseline (last measured in 2006) and forms part of MAS work to develop a new UK Strategy on Financial Capability. The report brings together a range of research by MAS, focusing on two studies in particular. One is a major ethnographic survey, called Money Lives, which is one of the largest longitudinal studies into UK financial behaviour in recent years. The second is a new, large scale quantitative survey that provides a benchmark for financial capability in the UK in 2013. You can read the full report and the associated data tables at: https://www.moneyadviceservice.org.uk/en/static/the-financial-capability-of-the-uk

Some of the findings are:

·         The proportion of people struggling to keep up with their bills and credit commitments has risen from 35% in 2006 to 52% in 2013. 49% of people are concerned about their finances and 47% of UK adults find it hard to live within their means.

·         Positive money habits are emerging; 84% of people keep track of their money and 85% of people say they are saving.

·         Consumers are shopping around to get the best deal; 93% said they compare prices before deciding to buy an item which they think is too expensive, and when buying insurance half (51%) will compare quotes from a number of insurers before purchasing.

But many people still have poor money skills and understanding; 16% are unable to identify the balance on a bank statement and 32% feel uncomfortable talking about money matters.

When asked to define their attitude to money, 25% of the population say they prefer to live for today rather than plan for tomorrow and 18% of people, if asked out for the evening, would still go, even if they couldn’t afford it.

The research will help us to develop the UK Strategy on Financial Capability, which will be published in early 2014. The strategy will set out a framework for helping people across the UK to manage their money. Many thanks to those of you who have contributed to our call for evidence. Later in the year we will launch a formal consultation on the draft strategy, which will build on the evidence that we have received and on the research we have published today. If you have any questions at this stage on the research or the strategy, please don’t hesitate to get in contact.

Press Release by Money Advice Service