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A new UK-wide strategy to transform the country’s financial well-being in a decade has been launched by the Money and Pensions Service (MaPS) under its government mandate.
The UK Strategy for Financial Well-being sets out a ten-year vision to improve millions of lives and includes five priority areas to help people make the most of their money and pensions. The strategy is aimed at transforming the lives of many individuals, benefiting communities, businesses, the economy and wider society.
The UK Strategy for Financial Well-being establishes five ‘agendas for change’ and sets goals to be achieved by 2030. These are:
Financial Foundations: 6.8 million children and young people getting a meaningful financial education – an increase of 2 million from 2019[1]
Nation of Savers: 16.7 million working age people who are struggling[2] and squeezed[3] saving regularly – an increase of 2 million
Credit Counts: 2 million fewer people often using credit to pay for food or bills
Better Debt Advice: 2 million more people getting the debt advice they need; currently only 32% of those who need debt advice access it
Future Focus: 28.6 million people understanding enough to plan for their later lives, and during them – an increase of 5 million
Susceptible to financial detriment
The strategy will also examine factors which can make people particularly susceptible to financial detriment, such as mental health conditions and gender. It will be delivered in collaboration with a broad range of organisations and experts from all sectors.
What is financial well-being?
Financial well-being is about feeling secure and in control. It is knowing that you can pay the bills today, can deal with the unexpected tomorrow and be on track for a healthy financial future. People should feel confident and empowered.
Why is a UK strategy needed?
Poor financial well-being has knock-on effects for our mental health, physical health and relationships.
We know that:
11.5 million people have less than £100 in savings to fall back on
9 million people often use credit to pay for food or essential bills
22 million people say they don’t know enough to plan for their retirement
5.3 million children aren’t getting a meaningful financial education
Investing money for retirement
People who enjoy good financial well-being are more productive at work, and businesses also benefit from having customers who can afford to keep up with bills and payments. Individuals and the wider economy benefit from people being able to invest money for retirement.
Over the first half of 2020, MaPS will work with leaders and experts from across the public, private and voluntary sectors to set out clear delivery plans to achieve the five goals, with specific plans for England, Scotland, Wales and Northern Ireland.
Following this mobilisation phase, MaPS will develop its own corporate strategy which will define how the organisation will activate the UK Strategy and continue to deliver on essential money and pensions guidance and services to its customers.
Source data:
[1] 2018 Financial Capability Survey, Money and Pensions Service.
[2] MaPS defines those who are ‘struggling’ as people who find it hard to keep up with bills and payments and to build any form of savings buffer. They are the least financially resilient segment and the most likely to be over-indebted.
[3] Those who are ‘squeezed’ are working-age consumers with significant financial commitments but relatively little provision for coping with income shocks. They are digitally savvy and have high media consumption, but this is more for entertainment than financial information. This is based on the Money Advice Service Target Market Segmentation.
If you have any questions about this article, then please get in touch with Waverton Wealth Director and Chartered Financial Planner, Stephen Hall.
