Housing Foundation welcomes Pathfinder progress 8 July 2008 NEWS RELEASE For immediate release: 8th July 2008 FOUNDATION WELCOMES PATHFINDER PROGRESS The Resolution Foundation today welcomes the Government’s Financial Capability Action Plan1 and the announcement that the North West and North East of England have been chosen to site the Money Guidance pathfinder. The Financial Services Authority is taking forward the Money Guidance service following the final report of the Thoresen Review of Generic Financial Advice published earlier this year.2 The Thoresen Review’s report set out a blueprint for a national Money Guidance service with the potential to deliver a step change in the nation’s financial health. The Government endorsed the Review’s findings and committed £12m to a regional pathfinder. The Foundation began working on financial advice in 2005. Having discovered an ‘advice gap’ for 12 million low earners of working age and a further 3 million low earners in retirement, the Foundation then developed proposals for a national generic financial advice service. This proposed service was aimed at low earners in the ‘advice gap’ – people who are not currently attractive to commercial providers of advice, nor receiving support from existing voluntary sector provision. Sue Regan, Chief Executive of the Resolution Foundation, said: “The Foundation is delighted to see progress being made on the Money Guidance pathfinder with the regions now selected and the commitment to its launch early next year. Given the current economic climate, there is clearly no time to waste in getting the pathfinder operational and a full national service must then be rolled-out urgently.” The Foundation’s research has shown that increasing access to financial advice will lead people to reduce spending on credit and debt products, and invest more in savings, pensions and insurance.3 A YouGov poll carried out for the Foundation last year revealed huge concern about people’s financial health and overwhelming public support for such a service.4 The Foundation’s research has shown that increased access to financial advice would leave consumers significantly better off, reduce levels of financial stress and provide sizeable savings in public spending on welfare benefits.5, 6 /Ends For further information please contact Sue Regan on 020 7489 4870 / 07833 764 977 or sue.regan@resolutionfoundation.org All the Foundation’s research, reports, briefings, seminar notes are available on our website www.resolutionfoundation.org Notes to editor: (1) See http://www.hm-treasury.gov.uk/media/C/7/fincap_jointactionplan.pdf (2) The Thoresen Review of Generic Financial Advice was announced by the Economic Secretary to the Treasury on 15 March 2007.See www.hm-treasury.gov.uk/independent_reviews/thoresen_review/thoresenreview_index.cfm (3) See A national dividend: The economic impact of financial advice which can also be downloaded from the Foundation’s website www.resolutionfoundation.org (4) The sample size for the survey was 2,010 adults. Fieldwork was undertaken from 25-27 July 2007. The survey was carried out online. The results were weighted and are representative of all GB adults (aged 18+). Among the key findings: Nearly 70 per cent of parents worry about how their children will deal with the financial decisions they will face during their lifetime Almost 80 per cent of people admit to worrying about their finances ‘often’ or ‘sometimes’, with 1 in 10 worrying ‘all the time’ Almost 60 per cent of people believe that the average UK person is in a poor state of financial health Over 60 per cent of people think that people find managing personal finances more challenging than they did 10 years ago Nearly three-quarters of people support proposals for a new generic financial advice service, with only 7 per cent opposing this 49 per cent of people who expressed a view said they supported a public-private funding arrangement between the Government and the financial services industry, in preference to it being paid for solely by the Government or the industry (5) See The advice gain: The impact of generic financial advice on the financial services industry which can also be downloaded from the Foundation’s website (6) For details of the pilot schemes, see: http://www.hm-treasury.gov.uk/independent_reviews/thoresen_review/thoresen_press_100907.cfm
