16 January 2007
Ed Balls, the Economic Secretary to the Treasury, has launched
the Government's long-term approach to financial capability, and
announced that every adult is to be offered free basic advice about
financial products in a nationwide scheme to be set up within five
years.
Ed Balls announced that a new taskforce, led by Otto Thoresen,
Chief Executive of AEGON UK, has been asked to research and design
a national generic financial advice service - ensuring that every
person, including those on the lowest incomes, can get quick, easy
and simple access to good quality financial advice. A
cross-departmental Ministerial group will co-ordinate the
Government's work plan to enhance financial capability and ensure
Government programmes link effectively to the new advice
service.
The Government says it believes that everyone in society has the
right to get advice they can understand and trust on the financial
options available to them, from getting out of debt through to
choosing a home and saving for a pension.
Otto Thoresen will report to Ministers by the end of the year.
The Government will publish an action plan by the end of 2007
setting out how financial capability will be integrated into
existing services, particularly for those most vulnerable to the
consequences of poor financial skills and taking forward plans for
a national approach to generic financial advice.
Ed Balls said: "We want everyone in society to have access to,
and use, financial services with confidence. Financial decisions
are difficult. Financial products are complicated and there can be
too much jargon. This puts people off, or they can end up buying
something that is not right for them. Sometimes people just want to
discuss their financial options and not buy anything. We believe
there is a gap in the provision of this last type of advice -
generic advice - and I have asked Otto Thoresen to research and
design a national approach for filling this gap. I am determined
that we should extend the benefits of generic advice to all
consumers who need it."
James Purnell, the Pensions Reform Minister, said: "Millions of
today's workers are not saving enough for their retirement. That's
why we are making it much simpler for people to save through
automatic enrolment into a new system of personal accounts, or into
workplace pension schemes. Automatic enrolment will help people
save. But it will still be their decision whether to opt out, and
how to invest their money. Generic financial advice will be vital
to help them make those decisions, and a wide range of stakeholders
have urged us to ensure that is available. This announcement is the
start of making that generic advice a reality."
