Financial Capability

Is part of Financial Inclusion and means being able to:

• Keep track of money
• Make ends meet
• Plan for the future

Financial Capability is point two of the three point process for Financial Inclusion. Without Financial Capability skills people may be worse off as a result of access to financial products. People with lower Financial Capability skills or who lack confidence may keep track of their money by financially excluding themselves, for example:

• remaining on a more expensive cash top-up electricity meter instead of using a bank account to pay by direct debit
• drawing all their income to spend as cash rather than use a debit card for payments

How to raise levels of Financial Capability locally

1. Social housing - Work closely with Registered Social Landlords and the local Housing ALMO.  Housing providers have led the way for Financial Inclusion throughout the UK. See our Meeting on 23 November 2010 for examples of work in London
2. Money Advice Service - Maintain contact with the Money Advice Service Regional Manager for your borough Opens in a new window to keep up to date with the latest free resources and initiatives.The Money Advice Service has a new 'Health check' service:

Opens in a new windowUnderstand your money in minutes

1. Borough website information - Ensure residents have access to free and impartial self-help resources by creating a link from the Borough website to the Money Advice Service website Opens in a new windowFinancial Capability Forum
2. Take part in the Financial Capability Forum for your area -These free events are run jointly by Citizens Advice and the Money Advice Service and take place quarterly, providing briefings on Financial Capability issues, and the chance to share good practice. For details for the next Forum contact the Money Advice Service Regional Manager for your borough Opens in a new window
3. Third sector input - Engage third sector partners such as the local Citizens Advice Bureau to feature Financial Capability material at neighbourhood events. Use specialist Financial Capability partners from the third sector to work closely with neighbourhood groups. For example: Quaker Social Action: Made of Money Opens in a new window improves Financial Capabiltiy for Families Income Max Opens in a new window provides a range of material to ensure people are aware of benefit entitlement
4. Outreach to Credit Union members - Contact your local Credit Union Opens in a new windowand offer support so that they can develop their Financial Capability resources for members.
5. Outreach to schools via School Governors - There is still no statutory requirement to include personal money management in the school syllabus and boroughs no longer have direct input to what is taught, but can alert local school governors to Financial Capability resources. For example, the annual "My Money" Week run by registered charity PFEG Opens in a new window(Personal Financial Education Group). Free information packs are available now for the 2011 My Money Week Opens in a new window which starts 27 June 2011.
6. Money Guidance - By arrangement with the Money Advice Service, A4E is running one-to-one Money Guidance appointments for London residents 2011 -  2012. To use this free service, all you need to do is:

•      provide a venue
•      book a session for 2011 -2012 with A4E (Email Stephen Patrick Hughes Opens in a new window) 
•      set  up an appointment list

(This is toolkit item no.8)