The financial services industry must do more to help people in the UK engage with their money, senior figures have claimed.
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.”
His comments came as the Money Advice 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.
Charles McCready, programme director for the Tax Incentivised Savings Association, said: “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.”
The financial capability strategy, which researched the attitudes of 5,000 people towards money, found that four out of 10 adults were not in control of their finances.
Four in 10 adults had 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. A further 20 per cent of the population were unable to read their bank statements.
In September, the Treasury and the FCA embarked on the financial advice market review, a consultation on financial advice and how it is delivered.
Joel Adams, founder of Cheshire-headquartered LIFT-Financial Ltd, said: “On anyone’s financial journey, education is vital, and when it comes to debt and borrowings, Mas does help people.
“As far as pensions, savings and investment go, however, these are more complicated and should be left to regulated financial advisers.”