A Money Advice Service (MAS)-backed strategy to boost the financial capability of the nation has launched today, following research which suggested a bleak picture of the nation's financial understanding.
Running over the next ten years, the strategy seeks to improve people's ability to manage money well day to day, prepare for and manage life events, and deal with financial difficulties.
It will also look at educating people in the difference between financial advice and guidance and to make them understand when they need advice and how to get it.
The strategy will focus on both developing people's financial skills and knowledge as well as their attitudes and motivation.
Before launching the strategy, the MAS carried out research among 5,000 people and consulted with key organisations and institutions to paint a picture of the problems the nation faces.
• Half of families have life cover
• 21 million people don't have £500 in savings to cover unexpected bills like replacing the fridge or mending the car
• 19 million don't have an approach to budgeting that they feel works
• 8 million have problems with debt and of those, just one in six is seeking help
The strategy will be governed by the MAS's Financial Capability Board, which is made up of high profile industry representatives including Hector Sants, former CEO of the Financial Services Authority and Otto Thoresen, former head of the Association of British Insurers, alongside representatives from the regulator and government.
It will be administered by the MAS.
The plan has not yet set a defined budget but will be developed based on "what works", according to Caroline Rookes, chief executive of MAS.
She said its progress will be monitored through a 'financial capability survey' and formal reviews will be published in 2020 and 2025, alongside updates on the strategy's website. The MAS will outline its financial and resource-based contribution to the project for the coming year in its next business plan.
Advisers will be able to contribute to the strategy by joining a number of steering groups, which will each have their set of specific targets and success measurements.
Although advisers are not "critical to financial capability" strictly speaking, Rookes said, financial advice nevertheless is an important part of life. "It's about helping people understand when they need advice and how to go about finding it," she said.
The work will focus on consumers of all ages - from education in schools to at-retirement.
Rookes said: "The strategy is a call to action to all those with an interest or ability to contribute to improving financial capability. This includes financial advisers who have a key role to play.
"The work of the strategy will be taken forward by a series of steering groups which will focus on the different life stages and themes. These are being set up at the moment and they will meet for the first time before the end of this year.
"We greatly valued APFA's input to the financial capability consultation issued earlier this year and we look forward to welcoming advisers onto our specialist steering groups.
MAS's work on the strategy is in line with recommendations set out by the government-commissioned independent review into the service earlier this year, Rookes said, which called for it to slash its marketing spend and become more of a coordinator of services and provider of thought leadership.
She added it is also in line with the government and regulator's review of the advice market, the Financial Advice Market Review, which is looking at the general provision of financial advice for consumers alongside a consultation on the role of publicly-funded guidance such as the MAS.
The Financial Capability Board
Andy Briscoe, chair, the Money Advice Service (chair of the Board)
Jasper Berens, head of UK Funds, JP Morgan
Sherard Cowper-Coles, senior advisor, HSBC and chair of the Financial Inclusion Commission
Benny Higgins, chief executive, Tesco Bank
Elaine Kempson, emeritus professor, University of Bristol
Lily Lapenna, founder & co-chief executive, MyBnk
Phil Loney, group chief executive, Royal London
Eleanor Marks, deputy director communities division, Welsh Government
Louise Macdonald, chief executive, Young Scot
Gwyneth Nurse, director of financial services, HM Treasury
Steve Pateman, executive director, head of UK banking, Santander
Caroline Rookes, chief executive, the Money Advice Service
Roger Sanders, managing director, Lighthouse Group
Hector Sants, chair Archbishop of Canterbury's Task Group and StepChange Debt Charity
Otto Thoresen, chair National Employment Savings Trust
Sian Williams, head of national services, Toynbee Hall
Chris Woolard, director of strategy and competition, Financial Conduct Authority
Tom Wright, group chief executive, Age UK