The key drivers of financial capability for children and young people

The Money and Pensions Service undertook this analysis in 2023/2024 to identify the key determinants of financial capability among CYP aged 7-17, using data from the Children and Young People Financial Wellbeing Survey. This analysis is motivated by several objectives: 

• Building a strong financial foundation: In 2023, we published an evidence review bringing together research into the development of financial capabilities in children and young people. One of the key themes identified in that review was the provision of financial education for children from a young age in order to build the foundations for future financial capability and wellbeing. 
• Tailored interventions and policy guidance: Understanding of the factors that influence financial capability can be built into the development of targeted interventions and help shape policy. These interventions can address the specific needs and challenges of individuals and/or groups, thereby improving their financial outcomes. 
• Long-term impact: Ultimately, the goal is to equip children and young people with the knowledge and skills necessary to make informed financial decisions throughout their lives, and to become adults with high financial wellbeing.

For children aged 7–11, financial capability is driven primarily by parental influence, early attitudes, and emerging behaviours.

These percentages show the relative contribution of each theme to differences in financial capability, with higher values highlighting more influential drivers.

• Parental role modelling (12%)
• General temperament (8.3%)
• Savings mindset (4.6%)
• Learning about money (3.9%)
• Recall of financial education (3.1%)

For example, parental role modelling accounts for 12% of the differences we see in children’s financial capability, indicating that the financial behaviours children observe from parents and carers play an important role in shaping their own financial capability

Together, these findings highlight the importance of what children observe at home, alongside early experiences of saving and learning about money.

For young people aged 11–17, key drivers reflect a shift towards independent money management skills and confidence.

• Shopping around, budgeting and planning (9.5%)
• Savings behaviours (9.2%)
• General temperament (6.2%)
• Financial locus of control and recognising online advertising (3.7%)
• Talking about and understanding money / parental role modelling (3.7%)
• Managing and spending money (3.5%)

These results suggest that adolescence is characterised by growing autonomy, with active money management skills and continued parental influence remaining central.

• Key drivers of financial capability for children and young people - full report (PDF, 295KB)Opens in a new window

This is an exploratory piece of analysis, so the findings should be treated as indicative. But we feel this provides a good foundation for further research in this area, and welcome more advanced analyses to help drill down into the associations between the key drivers and financial capability. We are happy to collaborate with external stakeholders to advance this project.

This research is intended to inform the development of policy, interventions and delivery approaches by identifying the key drivers of financial capability at different stages of childhood and adolescence. The analysis provides evidence on how financial capability develops over time and where interventions are likely to have the greatest impact.

At MaPS we are using this to inform future policy and analysis around improving children and young people’s financial capability. The findings serve as a starting point in identifying the key drivers of financial capability and we intend to build on this analysis using data from the 2026 CYP Financial Wellbeing Survey when it becomes available (interviews planned for later this year).