In its study into financial capability, the FSA revealed many people did not plan ahead, with a great number also neglecting to take adequate steps to choose financial products that met their needs. As a result of rising costs, related to higher education and retirement, the FSA also indicated that the greatest demands were being placed on those least equipped to deal with them.
Central to the study were the statistics that revealed the UK currently has £1.2 trillion of consumer debt, £212 billion of unsecured debt and a doubling of bankruptcies and Individual Voluntary Arrangements over the past two years.
As a result, the FSA has pledged to help consumers become more capable, while delivering a regulatory regime that is proportionate and risk-based. A Learning Money Matters course, for which 350 schools have signed up, is one such move and the FSA has also pledged to continue campaigns to improve relations between the industry and consumers.
Vernon Everitt, director of retail themes at the FSA, said: “There is a common agreement that a key element in helping people avoid serious problems is improving the financial capability of the population. We must take this issue as seriously as some of the other major challenges faced by society.”
Harry Katz, principal at Norwest Consultants, said: “The best move the FSA could possibly make is to stay perfectly still. It is the job of a government to ensure its citizens have a reasonable level of education and financial education should be included.”
