Press Release

Strong backing from CII Group on financial capability action plan

Monday, July 7 2008

The CII Group has reacted to the joint Treasury and FSA statement today on a financial capability action plan by saying a coordinated national strategy on financial capability is essential, with financial advice being offered be face-to-face wherever possible, if public confidence in the financial services sector is to be restored.

Detailed research published last week from the CII on consumer financial capability (www.cii.co.uk/research ) in the current economic climate concluded that more than half (53%) of those surveyed are less confident their savings are safe, with nearly six out of ten (58%) people saying they feel less financially secure."

The research also showed that proposals made in the Thoresen Review for a national ‘drop in’ Money Guidance service could help improve the public’s understanding of money matters and restore consumer confidence during the current emerging economic downturn.

CII chief executive Dr Sandy Scott believes that despite industry reservations and relative lack of public understanding, the proposals for Money Guidance are a central component in improving financial capability and access to financial services:  “In the current economic climate, a national service that provides independent, accessible and above all well-trained guidance on money matters would be a key weapon in the consumer’s armoury for financial capability.”

CII Director of policy and public affairs David Thomson said, "The CII and the Personal Finance Society (PFS) both believe that the service must be delivered face-to-face as well as by telephone and the Internet.  The Money Guidance pathfinder piloted in the North East and North West early next year must reflect this and be resourced accordingly."

Other key findings of the CII research were:

- One in ten homeowners are worried their home might be repossessed 

- Nearly half (45%) of consumers said they would use the proposed "Money Guidance" generic advice system

The research confirmed that the Government’s efforts to promote financial capability and deal with household finances needs to be face-to-face rather than Internet-based.

Those surveyed said that when asked who they rely on for advice, consumers showed a clear preference towards face-to-face services, such as Citizens Advice Bureaux and banks/building societies; whereas they would rely "not at all" on telephone services or Internet-based facilities such as the FSA (55% said not at all) or general financial web sites (60% not at all) who need it most."