Money management consultation launched

A new consultation has been launched by the Money Advice Service seeking to find out more about the financial attitudes and money management skills of Britons.

Research by the body has shown how almost half (48 per cent) of people admit to falling into debt as a result of spending on their social lives, while 50 per cent of people do not set a regular budget to ensure their financial responsibilities are met each month.

Furthermore, just 20 per cent of the population can currently be classed as financially secure – their finances could absorb several months of a lack of income without considerable adverse impact on their living conditions.

As a result, the Money Advice Service and the Financial Capability Steering Group have now launched a consultation aimed at determining those factors that get in the way of good money management for households.

Complex factors can be at play when it comes to financial planning and understanding the interaction of these pressures and responsibilities is essential to deliver better money management for UK households in the future.

A number of draft recommendations to improve household spending habits have already been put forward by the group – such as simplifying terms and conditions for loans, more clearly setting out the cost of credit, better financial education in schools and working with parents to develop good spending habits for their kids from an early age.

Joanne Shaw, chair of the Financial Capability Steering Group, commented: "There are already some highly effective initiatives, but we all – meaning the financial services sector, charities, regulators, government and the Money Advice Service – need to work together to ensure that people gain the experience, skills and confidence that will enable them to be great money managers.

"We now want to hear from people around the UK … on how we can achieve this."

The deadline for consultation responses is October 24th this year, with the draft policies set out above to be revised and a final publication of recommendations to improve the financial skills of the nation to be released in early 2015.

Posted by Amy White