New help for people managing money worries

Action to give people more support to tackle their money concerns is being announced today by Yvette Cooper MP, Chief Secretary to the Treasury and Hector Sants, CEO of Financial Services Authority (FSA).

The Financial Capability Action Plan sets out new measures to give people free advice and assistance to help them to better manage their finances. The action plan also makes further progress towards the FSA's and the Government's goal of helping people become better informed, better educated and more confident with money.

The key initiatives outlined in the plan, include:

Development of an expanded one-stop-shop for information and support based around the FSA's Moneymadeclear website and consumer helpline, to be promoted widely after the summer. This will direct people to specialist advice on issues such as problems with debt, mortgages or utility bills, as well as providing information for first time buyers or other people looking for financial help.
A new £12m programme to deliver new free advice on money matters including budgeting, money management and planning to help hundreds of thousands of households across the North West and North East of England as part of the Money Guidance "pathfinder" recommended by the Thoresen Review of generic financial advice. It will be launched early next year, providing personalised support to people looking to make their money go further.
Support for personal finance education in schools, through the Government's new £11.5m three-year programme My Money and the FSA's £16m Learning Money Matters programme. This programme will support financial capability for children and young people from ages four to nineteen, focusing on the financial decisions children meet from when they first encounter money until they leave school.
The measures will help households facing money worries access a wide range of specialist help and advice, making it easier for families to get support from the £200m programme of debt and financial advice services funded by this Government. Once in place the FSA one-stop shop will also direct people worried by rising energy bills towards independent sources of advice to save consumers money on utility bills.

Launching the Action Plan, Chief Secretary to the Treasury Yvette Cooper MP, said:

"Many families are feeling the pinch as a result of high fuel and food prices, and the impact of the credit crunch on mortgage lending. But when people are facing money worries they often don't know where to turn. We need to make it much easier for people to get access to information, help and advice

"The Government is also determined to do more to create an environment where people get personal finance education and information from the start of their lives to the end; helping them with money problems and supporting them at key points in their lives, for example moving into higher or further education, having a baby, or planning their retirement."

Hector Sants, Chief Executive of the FSA added:

"We are delighted that together with our partners in the Treasury we are able to announce our chosen regions for the money guidance pathfinder, as well as new plans to extend our information campaign to benefit the many people who may be struggling with their finances in these tougher times.

"In the past three years, the FSA has made great strides in tackling the low levels of financial capability in the UK and helping everyone to get to grips with their finances. In partnership with the Government, we want to develop money guidance to help consumers to be able to make sound money choices, to know what questions to ask of their financial service provider, and, just as importantly, to have the confidence to do so and to know where to go if things go wrong."

Economic Secretary to the Treasury, Kitty Ussher MP said:

"Learning to manage money is an essential skill for everyone and I'm thrilled that we are able to announce the new £11.5m My Money scheme today. This Government is committed to ensuring that at every age people have the education, support and skills they need to make the right money choices, plan for their future and provide financial security for their families. I'm convinced that the My Money programme, along with the FSA's Learning Money Matters initiative will have a long-term impact on the financial security of future generations."

Notes for editors

1. Helping you make the most of your money: a joint action plan for financial capability

2. The Government funds a wide range of help for those looking to make their money go further or for help when things go wrong. The FSA and Government will work over the next few months to develop and expand the moneymadeclear website and consumer helpline to provide practical information and act as a gateway so that people know where to turn to get the information and support they need.

3. The Money Guidance pathfinder will go further and provide personalised help to people in the North of England, how to budget better or how to make good financial decisions, for instance over mortgages and pensions.

4. For those in immediate financial difficulty, the Government currently funds over £200m of debt advice for individuals. This funding supports:

National Debtline
Citizens Advice
Local CA Bureaux

5. The Government also provides significant support to the Money Advice Trust (MAT), a charity that aims to ensure that over-indebted individuals have easy access to appropriate (preferably free and independent) forms of debt advice. MAT funds The National Debtline, a free to use debt advice phone service with 110 front line staff. National Debtline served 105,000 people last year.

6. The Government has also made commitments to:

Strengthening the capacity and expertise of the National Housing Advice Service to provide independent expert advice for people struggling to pay their mortgage or loan. Expert knowledge of both housing law and financial regulations mean that over 80 per cent of cases could be resolved without the need for a court hearing in the first place.
Make arrangements with the Ministry of Justice, to ensure households at risk of repossession have access to free legal advice and representation at county courts throughout England. Such advice means that in 85 per cent of cases immediate repossession is avoided to allow other options to be explored. This is being extended to all county courts in England to ensure representation is available for all households who may need it.
Joint work with mortgage lenders to improve information and support for borrowers. This includes increasing awareness that lenders may be prepared to offer reduced repayments, or mortgage breaks; early contact with borrowers coming off fixed rates to explain the options available; and making clear that lenders wish to do everything possible to avoid repossession. To support this work, the National Housing Advice Service will be drawing together the advice and support that is on offer from Government and the financial services industry, to help people take responsibility and prompt steps to address any difficulties.

7. The big six energy companies have agreed with the Government to increase their level of social assistance to £150m a year by 2010-11 from the current level of £56m (a total of £225m extra over 3 years)

8. There has also been an increase in assistance for households to reduce their fuel bills by making their homes more fuel-efficient. The combination of Warm Front and CERT means that the resources available for this will rise by £680m to £2.3bn in over the next three years:

The Government's Warm Front scheme has assisted over 1.6m households through energy efficiency and heating measures, and benefit checks.
The Carbon Emissions Reduction Target is expected to deliver £1.5bn spending by suppliers on energy efficiency in vulnerable households. All suppliers offer free cavity wall and/or loft insulation.

9. HM Treasury commissioned the Thoresen Review in January 2007 to research and design a national approach to generic financial advice. The Review's final report was published on 3 March 2008.

10. The FSA-led National Strategy for Financial Capability aims to find ways to improve the nation's financial capability and understanding of personal finance. It brings together interested parties from industry, consumer bodies, voluntary organisations, government and the media. We have a vision of better informed, educated and more confident citizens, able to take greater responsibility for their financial affairs and play a more active role in the market for financial services.

11. Financial Capability means:

being able to manage money;
keeping track of finances;
planning ahead;
making informed decisions about financial products; and
staying up to date about financial matters.

12. The FSA continues to roll-out its 'Delivering Change' strategy, a five-year programme to improve the financial capability of UK consumers, which we are now half-way through. The programme targets: school children, young adults who are Not in Education, Employment or Training (NEET), students in universities and Further Education (FE), employees in their workplace and new parents. We also deliver straightforward information through our Moneymadeclear consumer website and publications, and reach a wide range of consumers via our work with non-profit organisations. To date, the FSA has reached almost four million people against its overall target of 10 million people by 2011 and remains on track.

13. 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; securing the appropriate degree of protection for consumers; and fighting financial crime.

14. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.

15. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk.

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Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238 or the FSA Press Office on 020 7066 3232.