People to be encouraged to save and manage debt in 2013

Consumers in the UK are being encouraged to look after their finances in 2013.

The Money Advice Service is launching an eight-week consultation as it seeks to establish what its priorities will be in the coming 12 months, with these expected to include getting younger and low-middle income families to become more financially savvy.

It is seeking to redress two key statistics – that 76 per cent of UK adults are not regularly saving and 22 per cent are failing to set cash aside for their retirement – and so is hoping to run 150,000 debt advice sessions next year.

Gerard Lemos, chairman of the body, said that in the current economic climate, it is important people can access "real help" in an effort to solve their financial issues.

"In tough times, it's right that we prioritise those with the greatest need of support to manage their money. That's why young adults and low to middle income families are at the heart of this plan.

"And it's why we've focussed on helping people take everyday practical steps with money to weather life's ups and downs and plan for their and their family's futures."

It comes after research carried out by the Centre for Economics and Business Research discovered that financial illiteracy is costing the UK £3.4 billion. Because of the lack of basic financial knowledge of many people in the country, people are failing to get the best deals on offer.

According to the study, financial education can reduce the risk of unemployment by ten per cent, while the expense associated with retirement could drop by one-third. As well as this, people may be in a better position to use debt help.

Justin Tomlinson MP, chair of the All Party Parliamentary Group on Financial Education for Young People, said the financial world is becoming increasingly complex and so UK adults need to improve their skills to account for this.

By Amy White