FSA to tackle lack of financial knowledge in the UK – about time too.

March 28, 2006

lifestyle

At last the Financial Services Authority (FSA) is trying to tackle the problems that have been generated through a lack of consumer knowledge, particularly amongst the 18-40 age group, especially relating to savings, student loans, and debt matters.

According to an FSA spokeman, “Today’s 18-40 year olds are faced with greater challenges than were faced by their parents…the cost of not having the necessary skills to make sound financial decisions is becoming increasingly significant.”

Plans are to provide lessons to secondary school pupils in managing money and students in higher education will have access to debt and financial advice.

According to the FSA report,

  • Half a million households are in serious financial difficulty, even in current benign economic conditions
  • Most Britons are good at making ends meet but not so good at saving for the future
  • Seven out of 10 consumers have no savings in place to see them through a sudden drop in income
  • 42% of working age adults do not have a personal or workplace pension, yet 81% recognise that the state pension will not be enough for them to enjoy a comfortable retirement

With the financial pressure firmly on graduates through student loan repayments, lack of high paid graduate jobs, low starting wages for school leavers, high prices for first time buyers trying to get on the housing ladder, and the effective demise of most company contributing pension schemes, the onus has been placed on the young to further spread their already stretched finances to cover the future as well as paying off the past and trying to live in the present.

Consumers (including myself) need access to information, need to be helped to get the best deals, need to use information sites like Motley Fool, comparison sites like Moneynet, check out the products available online from the banks themselves, eg, Barclays. Make sure that you get the best deal. Use the information available, and don’t bury your head in the sand. With all the pressures that are placed upon us, and all the demands for our usually meagre finances, if you are anything like me, you will also need all the help you can get.

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