Financial capability in Northern Ireland 2014

1. Context
2. The study
3. Key findings
4. Points to consider

Context

The development of a Financial Capability Strategy for Northern Ireland consumers is a Programme for Government commitment. The aim of the Financial Capability Strategy is to equip consumers with the skills and knowledge to manage their finances effectively.

The Northern Ireland survey is carried out on a regular basis throughout the year by the Northern Ireland Statistics and Research Agency (NISRA). To establish baseline data for the development of a Financial Capability Strategy, questions on financial capability were included in the September 2012 Omnibus Survey. The 2014 survey is the second in a series of three surveys planned to take place in 2012, 2014 and 2017 enabling comparisons, monitoring and trend analysis to be performed.

The study

The survey is based on interviews carried out with people living in private households. A total of 2,200 addresses were randomly selected with a response rate of 58%. All questions were asked of those aged 18 or over (1,070 respondents), although some questions were asked of 16 and 17 year olds and others were filtered according to how a previous question was answered.

Key findings

Overall, 90% of respondents state they are currently getting by alright or quite/very well financially. 59% think things remained financially stable for them over the last year and a similar percentage (54%) think it will stay like this into the foreseeable future.

Making Ends Meet

• While most respondents never, or hardly ever, run out of money, almost a fifth (17%) regularly run out of money before the end of the week or month;
• Overall, there is an increase among those feeling they are getting by financially quite or very well, from 47% in 2012 to 51% in 2014 and fewer respondents who felt that things had got worse for them financially over the last year (34% in 2012, 23% in 2014).

Keeping Track

• In 2014, 94% of people with a personal or joint current account report using it for day-to-day money management (compared to 91% in 2012).

Planning ahead

• 39% do not have any savings set aside for a rainy day and 24% could not cover their living expenses for a month if their main source of income was lost;
• A third of respondents are not confident that they will have enough money to live comfortably throughout their retirement years.

Borrowing behaviour and choosing products

• 63% did not take out a loan in the last 12 months and 45% did not use credit facilities;
• 68% felt they could afford to borrow more if they needed and 23% felt they were at their maximum level of debt. A small minority (6%) said they had exceeded their borrowing limits and needed to pay some debts off.

Staying informed

• 72% thought they were at least 'fairly knowledgeable' financially;
• In the event that they were in financial difficulty, aside from friends and family, one third (33%) would contact the Citizen’s Advice Bureau and a similar proportion (31%) would contact their bank or building society in the first instance.

Financial knowledge

• There was an increase from 63% in 2012 to 69% in 2014 in those who rate themselves as good or very good at keeping track of money and also an increase in those who considered themselves good or very good at making ends meet (from 70% in 2012 to 74% in 2014);
• However, there was a decrease (from 47% in 2014 to 43% in 2012) among those who thought they were good or very good at staying informed about financial issues;
• At the end of the survey, all respondents were asked three questions designed to test knowledge relating to key everyday financial issues such as interest rates, inflation and discounts in shops. 58% answered all three questions correctly, 31% answered any two of the three questions correctly and 11% answered one or no questions correctly.

Socio-economic characteristics

• People with a disability, or those with a low level of educational qualification, have higher rates of financial vulnerability. For example, people with a disability report the highest rate (39%) of not being able to cover their living expenses for a month if their main source of income was lost (compared to 24% among all respondents);
• Other groups are also vulnerable in some important areas of financial capability. For example half of those aged 25-44 have no savings.

Points to consider

Methodological limitations:

• The design and structure of the survey ensures that it is a representative sample of the Northern Ireland population. Further details on the technical aspects of the survey are outlined in an annex to the report;
• The differences highlighted are intended to portray a broad picture and these may not be statistically significant.

Relevance: Relevant to the understanding of financial capability within Northern Ireland.

Generalisability/ transferability: May not necessarily be transferable to other geographic areas: the effect of different contexts etc will need to be considered.

Full report

Financial capability in Northern Ireland 2014 - full report