Financial capability, health and disability

Peter Allmark, Katarzyna Machaczek

It has been suggested that improving people's ability to deal with their finances, their financial capability, will directly improve their wellbeing and indirectly their health. To this end, financial capability initiatives have been funded by statutory and charitable health bodies, sometimes as part of a practice termed 'social prescribing'. This paper examines financial capability from the perspective of the Capability Approach to welfare and justice. It argues that the Approach shows current conceptions of financial capability to be flawed in that they focus on it as a personal quality in isolation from the socioeconomic environment. Using the Capability Approach as applied to disability the paper argues that financial capability is best viewed as a 'conversion factor' rather than a capability, that is, something necessary to convert resources, particularly money, into something of value to an individual, such as an adequate pension. Often, those judged as lacking financial capability are poor and this fact is at the heart of their inability to, say, plan a pension; by contrast, those who are not poor may find it relatively easy to do so and thus be deemed financially capable. Hence there are two distinct types of financial capability: i) in poverty and ii) not in poverty. To be able to plan a pension or make ends meet in poverty requires distinct and perhaps rare skills in an individual. However, some environmental or social changes may help individuals to improve their financial capability without calling on them to develop extraordinary abilities. Given the potential of such work to improve people's health, making such changes can reasonably be described as Public Health work. The article concludes with a defence of this use of the Capability Approach against possible criticism. The Capability Approach enables analysis of financial capability that is theoretically important to and has practical implications for Public Health.