Published: 04 March 2008
Pathfinder for New Money Guidance Service
Up to three quarters of a million people will get free money guidance on matters like managing debt, planning for retirement or saving for a mortgage deposit, under a new £12m pathfinder Yvette Cooper, Chief Secretary to the Treasury, has announced.
The new scheme is the main recommendation of the final report from the Thoresen Review, which has just been published.
Last year the Government asked Otto Thoresen to look at the provision of financial guidance in the UK and his report finds that many people could benefit from help on money matters at many points in their lives.
Launching the report, Yvette Cooper said:
"It could be working out credit card repayments, budgeting for a new baby, or planning for retirement - people have to make serious financial decisions at every stage of their lives.
Getting some free, independent and trusted guidance can make all the difference and can help families manage their budget and get a better return on their savings.
It could also help prevent people getting ripped off by loan sharks or caught out by the small print on a dodgy financial deal."
The Government already offers free debt advice for those with serious financial problems. But plenty of ordinary families could also do with some free money guidance at many points in their lives."
The Money Guidance Pathfinder will be delivered by the Financial Services Authority (FSA) and funded jointly by Government and the FSA.
The Government expects up to three quarters of a million people to access the service during the pilot, which will last for up to two years to establish how a national money guidance service could be delivered.
Thoresen found that by 2060, UK consumers could be up to £15bn better off if people have access to high-quality, personalised and impartial guidance on financial issues.
At the moment this isn't available to all because the commercial financial advice market finds it difficult to serve the needs of many ordinary consumers, particularly those on average or lower incomes.
He has set out a system to provide this advice that is accessible through a variety of channels - the internet, over the phone, and with face-to-face advice - and is delivered in partnership with a range of organisations which already provide excellent services and meet many of the principles he sets out for Money Guidance.
The vision is that people will know where to go to get impartial help on all their money issues, with easily accessible contact-points and, if needed, simple referral to specialist services.
The Pathfinder will provide the detail needed to set out how a national Money Guidance scheme could operate, and the Government will consider how best to go forward with a full Money Guidance service following a successful pilot.
The Thoresen Review was launched alongside Financial Capability: the Government's long-term approach, which sets out three long-term aspirations:
· all adults in the UK have access to high-quality generic financial advice to help them to engage with their financial affairs and make effective decisions about their money
· all children and young people have access to a planned and coherent programme of personal finance education, so that they leave school with the skills and confidence to manage their money well and
· a range of Government programmes is focused on improving financial capability, particularly to help those who are most vulnerable to the consequences of poor financial decisions
Further information
The Thoresen Review and final report
Financial Capability: the Government's long-term approach
FSA: Money made clear
Building financial capability in the UK
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