Financial Capability

Personal Financial Education

Paul Frost

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FSA Statutory Objectives

FSA is the UK’s financial watchdog

We have two consumer specific statutory objectives:

• Secure an appropriate degree of protection for consumers

• Promote public understanding of the financial system

Key Aims of National Strategy for Financial Capability:

Consumers who individually are:

– Financially capable

– Able to take responsibility for their own actions

Consumers who, as a group, can influence the market

Steering Group: senior representatives providing oversight

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Financial Capability means:

• Being able to manage money

• Keeping track of finances

• Planning ahead

• Making informed decisions about financial products

• Staying up to date about financial matters

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Background – The Challenge

People are having to take increasing individual responsibility for their financial affairs. In many cases they do not have the necessary skills

to be able to do this.

Main themes emerging from an in-depth UK-wide baseline survey:

Many people are failing to plan ahead adequately for retirement or an unexpected drop in income

A small proportion of people have debt problems, but they are often very severely affected

People do not take adequate steps to choose products that meet their needs

The under-40s are less capable, on average, than their elders

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Our programme targets (reach 10mn by 2011)

Schools

Consumer Communications

Young Adults

Workplace

New parents

Money Guidance

Online Tools

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Improving Financial Capability will significantly benefit individuals – by enabling them to:

• Review and set spending patterns which are in line with income

• Take on the right kind of debt when appropriate and having plans to get out of debt

• Set appropriate financial aspirations for the future and saving accordingly

• Identify risks and choose which to take and which to protect against

• Seek advice when required

• Turn to the right places for advice

Financial Education in the Workplace

Introducing“Making The Most of Your Money”

Chris May

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Making the Most of Your Money

All employees are invited to attend one hour seminars which cover budgeting, managing debt & planning for the future, including pensions

Seminars are delivered by trained presenters in your workplace

All staff will receive a financial education booklet, attendance at a seminar or CD Rom if they cannot attend a seminar

The booklets, CDs and seminars are all provided by the FSA free of charge

Example of presentation slides

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and for the Employer…..…..

Extra benefit - helps employees make the right choices at induction, retirement, share plan maturity

Enhanced awareness of employer’s reward package

Staff stress reduced, impact on absenteeism, staff retention

Positive results from staff surveys

Part of employer’s Corporate Social Responsibility agenda

For the Employee…..…..

Better understanding of personal finances

Improved awareness of employer’s reward package

Financial worries reduced

Increased ability to understand financial products and terms

Motivation to ‘shop around’ thus saving money

Value of financial education at work

An employer said “I think overall it’s a positive thing to do, we recognise that people’s private lives affect their work lives”

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What You Can Expect From Us

• A dedicated Relationship Manager to work with you to achieve success / objectives

• Advice and support on the communications needed to encourage staff to attend

• Key messages about the employer’s benefits are included in the presentation

• All materials (guides, promotional literature, and CD Roms) are provided and delivered free to agreed locations

• Specially trained presenters to deliver the agreed presentation at locations and times that suit you

• Summary feedback on the evaluation we receive from staff following presentations

• Robust Quality Assurance testing (mystery shopping).

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What we look for from you

• Management commitment that staff be allowed to attend presentations during the working day

• Effective internal communications to maximise attendance at presentations and to distribute the financial education guides

• Administrative support to monitor presentation bookings and ensure maximum staff turnout

• Suitable venues and equipment for presentations

• At least 20 staff to attend each presentation event

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Success so far - feedback

• Workplace has already reached over 1.3 million employees

• 86% of presentation attendees believe that the presentation played a role in their decision to take action in relation to their finances

• 91% said that it is a valuable part of their employer’s benefits

• 97% believe that its a good way to give people a better understanding of money matters, and

• 65% of presentation attendees felt they had more skills to deal with money issues as a result of attending the presentation

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Concluding Thoughts

Opportunity to be part of a world-leading initiative! We have so far delivered over 929,000 guides and 444,000 CD Roms through more than 350 employers, and over 34,000 staff have attended presentations.

You’re in good company! Many household names on this programme include the HM Revenue & Customs, Police, KPMG, SW Trains, E-on, Royal Bank of Scotland, Capita, Ford Motor Company, the Identity and Passport Office, Scottish and Southern, Teachers and various Councils.

The UK’s largest employer, the NHS, has also started the delivery of Making the Most of Your Money to staff across a number of NHS Trusts.

Programme is popular with staff and can support other corporate/HR goals and objectives.

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Questions?

Next steps