Evaluation Scotland Wales

Money allows us to meet our basic needs and directly affects our physical and mental wellbeing

Charities and third-sector organisations

  • 1 in 6 people are over-indebted
  • 27 million people don’t have a sufficient savings buffer to allow them to cope with a significant income shock
  • 12 million people are not saving enough for their retirement.

No matter who you’re working with, children, homeless people or people with disabilities, improving financial capability should play a major part in the help you’re providing. Our society exists within an economic model that shapes our ideas, activities and lives in many ways and money is a force which strongly influences modern society, shaping much of what is happening.

Facts and challenges

  • Attitudes and habitual responses about money can be shaped by the age of seven
  • In 2015 only 31% of 15-16 year olds stated they had received financial education at school
  • 27 million people in the UK don’t have a sufficient savings buffer to allow them to cope with a significant income shock
  • 19 million people don’t have an approach to budgeting that they feel works
  • Only one in two working-age people are currently paying into a pension or are a member of a previous pension scheme
  • Around a third of adults have unsecured debts equivalent to more than one month’s income
  • One in ten adults have missed bill payments in three months out of the last six
  • One in five could not read a bank statement
  • Three in ten people do not openly discuss their household finances regularly with anyone
  • Only 28% of people at retirement age have any form of plan for funding long term care.

What are the benefits of financial capability for charities and third-sector organisations?

By integrating financial capability into programmes, charities can play a preventative role as well as offer holistic support to a wide range of groups.

Money allows us to meet our basic needs — to buy food and shelter and pay for healthcare. Meeting these needs is essential, and if we don’t have enough money to do so, our wellbeing suffers. In most situations worrying about money makes things worse. Research shows direct links between how individuals deal with money and the consequential effects on their physical and mental wellbeing.

Consumers are increasingly required to shoulder more and increasingly complex financial decisions. Financial products are more sophisticated and the variety of available options often bewildering. However, many consumers have had very little understanding of finances in general, how to use credit or debt and the potential long term impact of poor decisions on their well-being.

Financial capability needs in different groups

  • Children no longer see cash and, as a consequence, their attitudes to money are different
  • The way we shop has changed - online shopping has become the norm for many, creating opportunities to use and overextend credit – and accumulate debt, fast
  • We are living longer which means we need more money for our retirements than previous generations
  • The financial landscape changes dynamically, new financial institutions, new products, new benefits against a background of new technologies have created a fast moving, often bewildering, environment.

It is fair to say that any intervention, if its intent is to offer a holistic solution to a recognised problem, will need to consider what role finance and financial capability plays in the solution.

The Financial Capability Strategy for the UK addresses varying needs at different stages of life. Learn more about The Strategy for:

How can this site help?

  • Increase your knowledge about your beneficiaries needs through our insight research
  • Understand from our research how introducing financial capability initiatives into your programmes will benefit your beneficiaries
  • Information on how to evaluate your work with guidance and templates in our Evaluation Toolkit
  • Learn more about what has worked for other organisations from our What Works Fund projects
  • Use the evidence from our Evidence Hubopens in new window to inform your own financial capability projects.