How we created the Children and Young People’s Financial Capability Tool

We have developed two sets of questions – one for seven to 11-year-olds, and another for 11 to 17-year-olds, to ensure the different learning outcomes across age groups is accounted for.

The questions aim to capture the key outcomes of financial capability – feeling confident, knowledgeable and future-oriented. They also cover the key behaviour and mindset indicators shown to positively impact financial capability, in particular savings mindset, and being involved in spending and saving decisions and financial aspirations. 

The tool allows users to measure children and young people’s financial capability based on a small set of questions, rather than having to conduct a larger survey. It also provides interested parties with a standardised set of questions which can be compared to other data. 

In doing so, the tool aims to improve standardisation and comparability of financial capability insights across the sector, as well as be of use to policymakers and providers designing effective practices. 

Progress towards the UK Strategy for Financial Wellbeing’s Financial Foundations national goal is measured through the Children and Young People’s Financial Wellbeing survey, which was last carried out in 2022. The national goal, set in 2020, aims for two million more children and young people to have a meaningful financial education by 2030.

This new Children and Young People’s Financial Capability Tool provides a set of multiple-choice questions to measure a child’s financial capability, which will complement the longer survey. 

Separate to this piece of work, albeit with some overlap, we have been developing a statistical model which aims to identify and understand what drives financial capability for children and young people.

However, for this new measurement tool, we haven’t classified questions as independent (inputs) or dependent (outputs) variables, meaning each variable is treated the same. Therefore, this approach is different to related analysis such as building blocks work, which is the process of grouping variables together based on what themes they measure and assigning them as either an input to the model or an output of the model.

To identify the best questions for the Financial Capability Tool, we primarily used a data driven approach, aiming to find an efficient and yet coherent suite of measures. 

As this is a tool we want children to be able to answer independently, we filtered the dataset to questions asked to the child only.

A final requirement of the design process was that the shortened list of questions could then be compiled into an overall score to provide a straightforward and clear measure of financial capability.

This scoring gives results on a scale of 0 to 100 for each child or young person, where the middle is close to the average of the UK population (i.e. around half the population would score under 50 and around half over 50).

It is worth noting that some questions are worth slightly more points than others, with the rationale outlined in Step 6 of the document.

Using data from our 2022 Children and Young People's Financial Wellbeing Survey, we see that the financial capability score for children increases as we’d expect with age - as children get older, on average their scores improve.

However, age is only one contributor to the overall score and there are many other important factors which lead to children’s scores improving, such as experience and exposure to money and financial education for example. 

Download a copy of the key questions that make up the Children and Young People’s Financial Capability Tool: 

We are keen to continue measuring changes in children’s financial capability and wellbeing over time. The Children and Young People Financial Capability Tool allows us to analyse and report on our Children and Young People’s Financial Wellbeing survey findings in a simplified way based on 12 key questions of financial capability.

Our hope is that the financial education sector will find this tool useful when they’re considering how to measure financial capability of children and young people aged seven to 17.

Of course, these questions are not only useful for collecting insights for policy making – depending on the nature of the financial education programme, and with some adaptation, they may also help to assess where a child is at the start and end of an intervention or can be used by practitioners as a diagnostic tool. 

Please get in touch with us via [email protected]Opens in a new window if you wish to use the CYP Financial Capability Tool and get access the related scoring details.

Also see

• Insights from our 2022 Children and Young Peoples financial wellbeing survey  
• Our Financial Fitness Tool, which was developed in a similar way and uses nine questions to assess the financial wellbeing of adults.