What is 'Financial Capability'?

It's important that children and young people are aware of all the financial things that affect them every day, so that they can make responsible decisions about their own finances as they get older and become more independent.

In 2014, The Money Advice Service commissioned a charity, NPC, to create the Financial Capability Outcome Framework which sets out the key learning objectives in relation to finance.

The objectives for children of 3-11 are shown below but to find out more, click here.

Financial Capability objectives

3-5 yrs

Understanding financial products and concepts

  • I am aware of basic financial language e.g. spend, save, change.

Understanding of money management 

  • I understand that money has a value.

Understanding the role of money in society 

  • I understand when people are paying for goods or services.

Attitudes to money 

  • I know I can’t do / have everything I want and that’s not a problem.

Self-confidence 

  • I can improve my own abilities through personal effort.

Self-control 

  • I am starting to feel responsible for my own behaviour and can follow classroom rules.
  • I am beginning to understand the need to suppress or delay behaviours or activities.

 Perseverance 

  • I have a positive approach to new experiences.

Exposure and access to appropriate financial products and channels 

  • I regularly see money being used.

Managed exposure to risk 

  • I hear how everyday spending decisions are taken.

5-7 yrs

Understanding financial products and concepts

  • I understand the concept of borrowing and can apply it to financial situations.
  • I know how to complete a cash transaction in a shop and understand why change is given.

Understanding of money management

  • I know that many things I want cost money.

Understanding the role of money in society 

  • I know that different coins have different values and that money exists in digital forms.
  • I understand where my parents and carers get money from and that money is a finite resource.

Applied numeracy

  • I recognise and use symbols for pounds (£) and pence (p) and combine amounts to make a particular value.
  • I can find different combinations of coins that equal the same amounts of money.
  • I can solve simple problems in a practical context involving addition and subtraction of money of the same unit, including giving change.

Literacy

  • I have attained the level of skills in English expected in the national curriculum for my age. Including the skills of reading (word reading and comprehension) and writing (transcription, composition, vocabulary, grammar and punctuation).

Problem solving

  • I can identify and understand a problem.
  • I can plan ways to solve a problem.
  • I can monitor progress in tackling a problem.
  • I can review solutions to problems and modify them if necessary.

Attitudes to money

  • I recognise the broad benefits of saving.
  • I understand my parents and carers may not be able to afford all of their wants.
  • I think spending decisions need to be considered wisely.

Aspirations and goals

  • I can save up to one month in advance.

Self-confidence

  • I am confident in my own opinion and can disagree with my friends / peers.

Self-control

  • I can differentiate between wants and needs.
  • I feel responsible for my own behaviour and can reflect and explain why I have behaved in certain ways.
  • I know it is sometimes better to wait for things and feel confident I can do this most of the time.

Perseverance

  • I feel ok making mistakes; I can learn from them.

Exposure and access to appropriate financial products and channels

  • I have somewhere I keep my money (e.g. a piggy bank).

Managed exposure to risk

  • I regularly experience managing my own money under supervision.
  • I am included in basic adult spending decisions.

7-11 yrs

Understanding financial products and concepts

  • I understand there are different purposes for savings.

Understanding of money management

  • I know how to pay for things that do not involve cash or cards.
  • I can track spending through keeping simple records.

Understanding the role of money in society

  • I know where people get money from and that different jobs earn different amounts.
  • I understand  companies exist to make money
  • I understand that advertising is trying to make me buy things.

Applied numeracy

  • I have attained the level of skills in maths relevant to applied numeracy including adding and subtracting amounts of money to give change, and solving simple problems involving fractions and decimals to 2 decimal places.

Literacy

  • I have attained the level of skills in English expected in the national curriculum for my age. Including the skills of reading (word reading and comprehension) and writing (transcription, composition, vocabulary, grammar and punctuation).

Problem solving

  • I can identify and understand a problem.
  • I can plan ways to solve a problem.
  • I can monitor progress in tackling a problem.
  • I can review solutions to problems and modify them if necessary.

Attitudes to money

  • I am starting to understand the difference between ‘price’ and ‘value’ – price is one measure of value.

Aspirations and goals

  • I can save for a goal up to a year away, rather than simply collecting money.

Self-confidence

  • I can reflect and explain why others have behaved in certain ways.

Self-control

  • I can make spending or saving decisions based on ‘wants’ and ‘needs’ differentiation.
  • I can delay gratification through employing a number of different strategies.
  • I am becoming responsible for my own thinking and learning.

Perseverance

  • I have perseverance and can recover from setbacks.

Exposure and access to appropriate financial products and channels

  • I have my own current / savings account.

Managed exposure to risk 

  • I use digital money online / in app purchase.