A new 10-year strategy to improve the UK’s financial wellbeing has been launched today by the government-backed Money and Pensions Service (MaPS).
The MaPS found that 11.5 million people in the UK have less than £100 ($130) in savings — the strategy aims to combat this and create a “nation of savers.”
Improving people’s financial awareness and education is high on the agenda as the MaPS found that 9 million people often use credit to pay for food or essential bills and only 32% of those who need debt advice access it.
The strategy also looks to the future to improve people’s understanding of later life planning and pensions as 22 million say they don’t know enough to plan for their retirement.
The UK Strategy for Financial Wellbeing sets five goals to be achieved by 2030. These are:
For 6.8 million children and young people to receive a meaningful financial education — an increase of 2 million from 2019.
For 16.7 million working age people who struggle or feel “financially squeezed” to build a regular savings habit — an increase of two million.
For 2 million fewer people to be often using credit to pay for food or essential bills — down to 7 million.
For 2 million more people to be getting the debt advice they need — up to 3.7 million.
For 28.6 million people to be understanding enough to plan for their later lives, and during them — an increase of 5 million.
The strategy will also look at factors which can make people particularly susceptible to financial detriment, such as mental health conditions and gender. In the first six months of 2020, the MaPS will work with range of organisations and experts from the public, private, and voluntary sectors to consolidate plans to achieve the five goals, and will include tailored plans for England, Scotland, Wales, and Northern Ireland.
A lack of financial wellbeing has knock-on effects for mental health, physical health, and relationships, MaPS said. Whereas, those who have good financial wellbeing are more productive at work, and businesses also benefit from having customers who can afford to keep up with bills and payments. There are also benefits for the wider economy as financially secure people are able to invest money for retirement.
Caroline Siarkiewicz, acting chief executive of the Money and Pensions Service said: “Financial wellbeing underpins personal health and happiness but it doesn’t happen by chance.
“We’re launching a strategy for entire lifetimes, aiming to expand financial education for children while ensuring everyone is equipped to plan for and enjoy their retirement. Key initiatives include increasing the availability of affordable credit, more payroll savings products and an expansion of free debt advice for when people are in crisis.”
Sir Hector Sants, chair of the Money and Pensions Service said: “The UK Strategy sets out our ambition to transform financial wellbeing over the next decade.
“The importance of financial wellbeing is under-appreciated. It is not only about financial capability but also feeling secure, in control, confident and empowered in relation to money. It is central to personal wellbeing and thus to living a contented life.”
The Money and Pensions Service was set up in 2019 and is sponsored by the Department for Work and Pensions.
Guy Opperman, minister for pensions and financial inclusion, said: “The government wants to make it easy for those who need it most to get help to make confident financial choices. The one-stop-shop Money and Pensions Service’s free, high-quality, impartial information and guidance delivers exactly that.
“Also, it has an important part to play in helping today’s young people become tomorrow’s savvy savers, and the development of groundbreaking digital pensions dashboards which will transform how all of us plan for retirement.”