• About the FSA
  • Media Centre
    • Briefing notes

The FSA has today published a paper detailing its methodology for carrying out the baseline survey to measure financial capability among UK adults.

The FSA commissioned the Personal Finance Research Centre (PRFC) at Bristol University to develop the methodology for the survey that would describe and measure the state of financial capability in the UK . The first stage of the scoping work was presented at a seminar in November 2004 and has since been further developed and exposed to consumer testing using focus groups. This has enabled us to refine the concepts as well as create a survey instrument suitable for a quantitative large scale study. For the purposes of this study, PRFC have used the approach of defining financial capability in behavioural terms and particularly in terms of a consumer's ability to perform various financial tasks. As such, four domains were identified within which consumers might be financially capable.

• Managing money: ability to live within one's means.
  
• Planning ahead: coping with unexpected events and making provision for the long term.
  
• Making choices: awareness of financial products and services on offer and being able to select the most appropriate.
  
• Getting help: gathering information oneself or through third parties.

The Survey instrument has been developed based on these four domains, with questions within each area relating to knowledge and understanding, skills and confidence and attitudes. Each domain will be measured separately, as being financially capable in every one is not a necessity for all consumers; for example someone who can manage their money day to day may not need to plan ahead.

The instrument will be tested out in two pilot stages before the main fieldwork which will both be carried out by a market research agency.

The findings of the survey will be published in the first quarter of 2006.

Footnote

• The full report on the methodology of the baseline survey can be found on the FSA website
  
• In November 2003, the FSA launched the National Strategy for Financial Capability to develop and implement a strategy to improve consumers' ability to make financial decisions with confidence. A Steering Group made up of a group of representatives from industry, government, voluntary agencies, employers, those who use financial services and those who comment in the media about them was set up to oversee this strategy. For further information, please visit www.fsa.gov.uk/financial_capability
  
• The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
  
• Our aim is to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve our business capability and effectiveness.