The baseline survey of financial capability in the UK

Authors: Adele Atkinson, Stephen McKay, Professor Elaine Kempson, Sharon Collard
Funded by: Financial Services Authority
Published by: Financial Services Authority
Publication date: March 2006
Report number:Consumer Research 47 / 47a / 47b

One of the main objectives of the four main objectives of the Financial Services Authority (FSA) is to promote public understanding of the financial system. In 2004, an FSA report announced that it would commission a "comprehensive baseline survey to establish the current state of financial capability in the UK". Subsequently the FSA commissioned PFRC to carry out an exploratory study, to design a baseline survey to measure financial capability in the UK.

The findings of this study are reported in 'Measuring financial capability: an exploratory study', which was published in June 2005. One of the conclusions of this study was that financial capability could be conceived as encompassing four different 'domains'. These domains were 'managing money', 'planning ahead', 'making choices' and 'getting help'. A survey questionnaire was subsequently designed to capture information about consumers' attitudes and behaviour in relation to these four domains.

Using this questionnaire, a national survey to measure levels of financial capability in the UK was carried out by BMRB between June and September 2005. When conducted, this survey was the most comprehensive study of its kind in the world, and comprised face-to-face interviews with a total of 5,328 people across the UK.

PFRC was commissioned by the FSA to analyse the data collected in the survey, and in doing this we had two aims:

  • To create a scoring mechanism to identify people's relative strengths and weaknesses in the four financial capability 'domains' identified in the initial study.
  • To be able to describe the types of people most likely to display higher or lower levels of financial capability.

The survey results are wide ranging and complex, and provide an important contribution to the National Strategy for Financial Capability in building long term change.

Levels of financial capability in the UK: results of a baseline survey (PDF, 932kB)
Baseline Survey of Financial Capability: methodological report (PDF, 248kB)
Baseline Survey of Financial Capability: questionnaire (PDF, 426kB)

Further information

In its 2007 review of the Financial Services Authority, the National Audit Office examined the methodology of the baseline survey and found it to be "comprehensive and professional".

The Financial Services Authority: A Review under Section 12 of the Financial Services and Markets Act 2000 [External link]

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