ISER’s Mark Taylor has been awarded funding to undertake further research into the links between people’s ability to manage their money and their psychological wellbeing and other aspects of their lives.
It’s the fourth research project commissioned by the Financial Services Authority (FSA) from ISER in recent months and stems from the FSA’s commitment to build people’s knowledge and understanding of personal finances.
This latest research project will look at the longer term impacts of financial (in)capability on people’s outcomes. Mark explained: ‘The motivation behind this is whether a person’s ability to manage and take control of their finances at a particular point in time has an effect on their lives in the future – is there a long-term benefit or cost associated with how well or how badly we manage our money? If so, this would place an even greater emphasis on the need to improve people’s financial capability, as doing so would not only have an impact on, for example, their current psychological and financial wellbeing, but also on their psychological and financial wellbeing in the future.’
The research stems from work carried out earlier this year which showed that that improved financial capability can reduce anxiety and significantly improve psychological wellbeing. The research will make use of data collected in the British Household Panel Survey (BHPS).
Earlier FSA reports:
Financial capability and wellbeing: Evidence from the BHPS
The impact of life events on financial capability: Evidence from the BHPS