Chris Pond, Financial Capability Director, FSA revealed findings of new research at Life Academy’s 2008 Annual Lecture
Life Academy was delighted that Chris Pond, Financial Capability Director, FSA, was the guest speaker at its recent 2008 Annual Lecture. Chris’ talk – ‘When it comes to the Crunch – what role for Financial Capability’ was very topical given the current financial climate and very well received.
Financial capability is often linked with economic wellbeing – the more educated a person is about their financial choices the better equipped they are to plan for their short and long term financial security. More significantly financial capability can be the difference between getting by and struggling. But what link is there between financial capability and personal or psychological wellbeing? How important is a ‘sense of control’ in determining the outcomes of financial capability.
At the lecture, Chris Pond revealed recently published results to research which the FSA commissioned Professor Edward Melhuish to: ‘explore the relationship between financial capability and wellbeing’. It is the first piece of research of its kind and a clear link was found between the two.
Prof. Melhusih found that parents who were more financially capable had:
- higher life satisfaction;
- higher self-esteem;
- lower depression;
- less malaise; and
- more control over their life.
These findings, from in-depth interviews with young mothers, prove that more financially capable people manifest greater psychological wellbeing. This evidence is supported by findings from the Legal Services Research Centre. They reported on the negative effects caused by financial difficulties:
- 89% reported worrying about their debts most of the time;
- 42% needed time off work due to money worries; and
- 45% stated that their debt problems had a negative effect on relationships with partners.
As Alan Pickering, Chairman of Life Academy commented:‘financial capability is more than moving from a ‘conned consumer’ to a ‘savvy saver’ - it is part of holistic life planning’.
Looking to the future Chris Pond said: ’we still need to ensure that adults feel equipped to take responsibility for their financial affairs, and future generations enter their adult lives feeling knowledgeable, confident and motivated to engage with their finances and manage their money well.’
