The FSA will also carry out a national benchmark survey - the largest of its kind - to measure current consumer confidence and understanding of financial matters. This will help to measure future progress of the strategy.
The seven projects are published in a paper "Building Financial Capability in the UK". The projects identified are:
- Schools: Laying the foundations – giving future generations a good grounding in personal finance education.
- Young adults: New responsibilities – helping young adults facing personal finance issues, maybe for the first time.
- Work: Reaching people through the workplace – developing ways of using the workplace to deliver personal finance initiatives.
- Families: Being a parent – building on the launch of the Child Trust Fund and developing further initiatives aimed at encouraging people to think about their needs as parents.
- Retirement: Planning ahead – building on the Government's 'Informed Choice' initiative.
- Borrowing: Making informed decisions – coordinating and pulling together the good work that is already being done and, if necessary, adding new work.
- Advice: The role of 'generic advice' – establishing what role generic advice has to play in financial capability; what it is, how it might be delivered and how it might be paid for.
John Tiner, Chief Executive, Financial Services Authority and Chair of the Steering Group said:
"Improving the financial capability of people in the UK is a big challenge. The seven projects highlight the scale of the programme we need to put in place if we are to start to make real improvements in general financial understanding. So far we have made a good start in laying the foundations of this ambitious programme and we have commitment from many of the key players that will make it possible to deliver it."Our recent snap-shot research has found that many consumers want to learn more about personal finance in schools and the workplace. For example nearly two thirds of people said that if they had learnt more about personal finance at school they would be more confident about dealing with their finances. We need to build on this growing appetite and find ways of reaching them to help improve their confidence and knowledge in financial matters."
Working Groups
Each project will be led by a Working Group assigned to develop these initiatives further and recommend fully costed proposals as well as overseeing their roll-out. The members of the Working Groups have been appointed for the expertise and knowledge that they, and the organisations they represent, can bring to the development of their project.
Resources and funding
The FSA has so far identified around £35-40 million which is spent on financial capability work, funded by a combination of Government money, industry contributions, charitable trusts and the FSA.
When the Working Groups report back with fully costed proposals it will be possible to estimate whether additional resources may be needed and if so, how much and who is best placed to provide the funding.
It is expected that, as at present, the majority of the funding needed to implement the programme will be provided by the various partner organisations. The FSA will continue to fund the leadership of the strategy and specific work where it is best placed to add value, from within the general levy it raises from the industry.
Keeping in touch with progress
Updates on progress on the strategy and the work of the Working Groups can be accessed here.
Background
- The Steering Group comprises senior people from government, firms, employers, trade associations, not-for-profit organisations, consumer organisations and the media. The Steering Group's work is supported by an Advisory Group.
- The seven Working Groups will be responsible for drawing up fully costed proposals. The Chairs of the Working Groups are as follows: Schools: Michael Foot, FSA (interim chair), Young adults: Trevor Phillips, Commission for Racial Equality, Work: Peter Ayliffe, Lloyds TSB, Families: Liz Welsh, Inland Revenue Retirement: Hilary Reynolds, Department for Work and Pensions, Borrowing: Michael Coogan, Council of Mortgage Lenders; Advice: Anna Bradley, FSA.
- The seven financial capability projects are published in the paper Building Financial Capability in the UK.
- The FSA sees its role in leading and co-ordinating this work as fundamental to meeting its objectives to promote public understanding of the financial system, to protect consumers and to maintain market confidence.
- The FSA Board retains accountability for the FSA's objective of improving public understanding of the financial system.
- The FSA expects its share of the total funding to remain relatively small. Once there is a clearer idea of the nature and cost of any new work that might fall to the FSA, the FSA will be able to plan changes in time for the consultation exercise on the 2005/06 fees. For the 2004/05 financial year, the FSA has said already that it will fund the investment in financial capability from the published budget.
- An NOP omnibus survey commissioned by the FSA, highlights why more needs to be done to help consumer gain greater confidence in dealing with their finances. When asked:
- Would people welcome more school based teaching of personal finance? Two thirds of people said if they had learnt more about personal finance at school they would be more confident about dealing with their personal finances.
- Would people welcome learning more about personal finance in the work place? Amongst employees there was an appetite to learn more about personal finance at work: 58% said learning in the workplace would make them more confident about dealing with their personal finances.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.
