The nation faces stark problems of financial literacy and capability, with 20 per cent of the population unable to read their bank statements, the Money Advice Service has warned.
As the service launched its 10-year financial capability strategy, in partnership with the UK Financial Capability Board, which aims to help people engage more with their finances, senior directors across the financial services industry welcomed Mas’s strategy.
Charles McCready, programme director for the Tax Incentivised Savings Association, said: “We are pleased to see that the strategy will help to focus on developing people’s financial capability, with the key objective of progressively raising standards.
“It is important that we all play our part in providing financial education, so that people understand the need to save, and to provide guidance and advice.”
He said it was also important to provide guidance and advice, which is easily available and accessible, to help people make informed decisions about how they manage their money.
In September, HM Treasury and the FCA embarked on the Financial Advice Market Review, a consultation on financial advice and how it is delivered.
Phil Loney, chief executive of Royal London, said: “The impact of low financial capability can be wide-ranging and irreversibly detrimental to peoples’ financial well-being throughout their lives.
“We fully support any moves to improve the nation’s capacity to deal with financial issues, but it will be important to ensure that public and private sector investment is properly targeted in order to achieve the best possible outcomes for consumers.”
Background box
The financial capability strategy, which researched the attitudes of 5000 people towards money, found that four out of 10 adults were not in control of their finances. Four in 10 adults have less than £500 in savings and one in three could not calculate the impact of a 2 per cent annual interest rate on £100 in savings.
