‘Financial capability and wellbeing: Evidence from the BHPS’ draws on the British Household Panel Survey to examine the links between people’s ability to manage and take control of their money, and their psychological well-being.
The report’s conclusions suggest that not only are younger people - particularly those who may have dependent children, are divorced or separated, and/or living in rented accommodation for example - more likely to be financially ‘incapable’, but that there is a correlation between this and higher mental stress, lower reported life satisfaction, and associated health problems.
Commenting, Rod McKee, Head of Financial Capability at the ifs said: “This report clearly points out that not only are younger people more likely to be less financially capable, and lack the skills necessary to manage their money, but that there is a link between that and stress, lower life satisfaction and health problems like anxiety or depression.
“Financial capability is a crucial part of life and it should be an essential part of education too. That’s why we have developed comprehensive financial capability packages for 14-19 year olds and for adults, to help them manage their personal finances effectively.”
