Financial literacy has to be a long-term aim, says watchdog

Welcoming todays report on financial literacy from the National Association of Citizens Advice Bureaux , Deborah Arnott Head of Consumer Education at the FSA said:

The NACAB report confirms what we already know, showing how easy it can be for people to get into dire financial straits, through a lack of understanding.

We have an objective from the Government to improve consumer awareness of financial matters generally. Although consumer credit and borrowing, which is at the heart of many of the problems discussed in this report, lies outside our regulatory powers, we have already done much to tackle the wider issue of financial literacy.

There is much more to do. It will take considerable resources and a sustained commitment from all quarters government, trade associations, educational organisations, the money advice sector and of course from firms themselves to make a real difference.

The FSA works strategically to make the most effective use of its limited resources in increasing public understanding of financial products and services:

• Increasing consumers understanding of their own needs: FSA Financial Planning is a new CD Rom, launched this week, that will help consumers identify their financial goals and priorities, gives guidance on what to consider when choosing products and provides information on their rights. It is available free from the Consumer Helpline on 0845 606 1234.

• Providing independent, easy-to-understand information: Free FSA factsheets and booklets on personal finance issues such as pensions, mortgages and getting financial advice are available from the FSA Consumer Helpline (0845 606 1234) and Consumer Help on the FSA website at www.fsa.gov.uk/consumer/ They are also distributed to CABs, libraries and MPs constituency offices.

• Helping consumers shop around for the best deal: generic information about financial products and services is available on Consumer Help at www.fsa.gov.uk/consumer/. The FSAs Comparative Tables now bring together in one place useful information on financial products, such as ISAs and personal pensions, including stakeholder pensions. The tables help consumers to see what is available at a glance so that they can then draw up a shortlist of products to investigate further.

• Answering questions: The Consumer Helpline deals with thousands of telephone enquiries. These range from checking whether firms are authorised to conduct business or hold clients money to explaining complaints procedures and providing information on what is and is not regulated by the FSA.

• Spearheading campaigns: The FSA identifies risks that the changing economic climate poses to consumers and develops appropriate campaigns to raise awareness of issues and provide the information that consumers need to make important decisions.

• Protecting consumers: FSA rules require firms and financial advisers to be honest, competent and financially sound. Dealing with authorised firms means that consumers benefit from the protection of a single Ombudsman service and single Compensation scheme.

• Reaching the next generation: The FSA worked closely with the Department for Education and Skills (DfES) to get personal finance on the school curriculum. We are now supporting the Personal Finance and Education Group (pfeg) to ensure that policy is turned into practice and personal finance is taught effectively in schools.
  

Notes for editors

1. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

2. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.

3. pfeg is a registered charity bringing together teachers, the FSA , government, consumer bodies and industry representatives. It aims to promote and facilitate personal finance education in schools so that young people are equipped to make independent and informed decisions about their personal finances and long term security.

4. The pfeg Excellence and Access Project will be launched at the Financial Services Authority on 26 November 2001. For more information contact Wendy van den Hende on tel 020 7220 1735.