The Money Charity warmly welcomes the opportunity to respond to the Money and Pensions Service Listening Document, which we see as making a vital contribution to a successful strategy to improve financial capability in the UK. We look forward to working with the Money and Pensions Service in the coming years, to play our part in achieving the challenging goals set out in the Listening Document.
Below are our Key Points in response to the Listening Document, or you can read our full response by clicking here.
Key Points
Overall
1. MAPS should facilitate and support sustainable funding for those working in financial capability to achieve:
- Substantially upscaled financial education in schools. This will require government and private sector funding with support from the Department for Education and Ofsted.
- Leveraging pensions advice to build a large-scale financial capability intervention among working age people.
- A communities-based strategy with UK and local groups representing people with particular characteristics, including people in vulnerable situations.
2. MAPS should adopt a broad definition of vulnerability, similar to that adopted by charity and consumer groups, the FCA and providers of essential services.
3. MAPS should explore ways of increasing funding to financial capability, so there is a better balance between debt advice and financial capability work overall, appropriate to achieving MAPS’s population-level goals.
4. MAPS should lead the development of quality standards for financial capability work, including accreditation, programme evaluation and practitioner competency.
5. To help close the advice gap, MAPS, working with FCA, should develop a clearer regulatory boundary between advice and guidance that would allow organisations like The Money Charity to give general advice tailored to individual circumstances.
6. To help maximise the resources committed to financial capability work, MAPS should promote a ‘financial capability charter’ among employers, committing employers to funded financial capability support for their employees.
7. MAPS should enable referrals between advice and support organisations to enhance the client experience. These can be progressed in steps, starting with manual referrals between known entities leading to providing technology infrastructure that facilitates referrals and enables sharing of client data in a GDPR compliant way.
The UK Money Guidance Landscape
8. Priorities include: fraud and scams, online gambling and the risk of financial capability applications (including pensions dashboards) being diverted into cross-selling or mis-selling of financial products.
Children and Young People
9. To achieve its Young People targets, MAPS should develop a strategy to win support and funding from all the relevant government agencies (particularly DfE, Ofsted and HMT) for expanded financial education in schools, with a clear ‘home’ in PSHE,and to coordinate the efforts of all interested external funders and delivery bodies. The young people financial capability sector needs a plan with clear goals and milestones.
Working-Age People
10. MAPS should leverage its coverage of pensions to promote all aspects of financial capability. Pension planning is an ideal entry point for financial capability work amongst working-age people.
11. MAPS should ensure that financial capability work recognises the particular experiences of women and the structural issues facing them in families, the workplace, access to financial services, career path, pension accumulation, etc.
12. MAPS should work with a wide range of community groups around the country who already have access to people with particular characteristics and needs (including people in vulnerable situations) and who know the financial capability needs of their constituent populations.
Working-Age People Dealing with Financial Difficulties and Debt
13. Expansion of debt advice needs to be within parameters that enable increased funding for financial capability, that build a financial capability aspect into recovery from unmanageable debt and which enable MAPS to achieve its population-level targets for improvement in financial capability.
Pensions and Planning for Retirement
14. The MAPS pensions strategy should include (a) ways of extending pension coverage to the remaining uncovered part of the UK workforce, and (b) raising contribution rates toward a level that will generate an adequate pension in retirement.
15. PensionWise should extend its coverage to include members of DB schemes.
People in Retirement
16. Social care needs to be a priority in financial strategies for later life.
Northern Ireland, Scotland and Wales
17. MAPS’ strategy should be called the ‘UK Strategy’ to avoid confusion with the identities of individual nations. The UK strategy should have distinct national strategies for Scotland, Wales and Northern Ireland.
Lessons Learned From the Financial Capability Strategy for the UK
18. The next phase needs to be about turning evidence into action. There needs to be a step-change in delivery and there should be specific goals and targets with a clear timescale and roadmap.
19. MAPS should look to the FCA and DWP models for partnership management.
Bringing Together MAPS’ Direct Services
20. MAPS should develop a vivid consumer-facing brand that will enable it to be seen by the public as the authority and ‘go to place’ for money and pensions guidance.
Our Priorities for Research, Insight and Evaluation
21. MAPS should facilitate the evaluation of scaled-up programmes, moving beyond the pilot or small-scale stage to interventions of greater intensity and duration, which could plausibly achieve larger results.