Listening Phase Report - Money and Pensions Service - Summary of discussions with stakeholders about our evidence base, priorities and ambitions ...
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Money and Pensions Service
Listening Phase Report
Summary of discussions with stakeholders
about our evidence base, priorities and ambitions
1Contents
Contents .................................................................................................................................................. 2
Executive Summary................................................................................................................................. 3
Start young ............................................................................................................................................ 10
Put savings first ..................................................................................................................................... 13
Make the credit market work for everyone ......................................................................................... 15
Make debt advice work better for consumers and funders ................................................................. 17
Embed pensions and retirement planning as a lifelong issue .............................................................. 21
Address unique needs of people in later life ........................................................................................ 25
Prioritise gender and mental health gaps............................................................................................. 27
Digital engagement ............................................................................................................................... 29
Make the business case to engage retail financial services.................................................................. 31
Be the backbone ................................................................................................................................... 32
Views on MaPS Corporate Strategy ...................................................................................................... 33
Next steps ............................................................................................................................................. 36
Appendices............................................................................................................................................ 37
2Executive Summary
Between April and June 2019, the Money and Pensions Service (MaPS)
conducted an intensive listening phase across the UK to engage with a wide
range of stakeholders and levy payers. The objective of the listening events
and other activities was to help MaPS to formulate a new UK Strategy for
Financial Wellbeing (published alongside this document), and our three-year
Corporate Strategy.
Since we embarked on the listening phase, we emerging thinking on future priorities, as well
have decided to publish: as a sense that messages were being actively
heard from a wide range of audiences and
• a one-year Corporate Plan for 2020/21 in incorporated into the strategy development
Spring 2020, and process. Emerging content shared during the
• our three-year Corporate Strategy for listening phase was also generally welcomed
2021/22 – 2023/24 in Autumn 2020. by stakeholders.
This will ensure that the MaPS Corporate This document summarises the feedback
Strategy is aligned to the UK Strategy for received from stakeholders during our
Financial Wellbeing (UK Strategy) delivery listening phase.
plans to be developed by challenge groups in Given the wealth of input we received1, this
the activation period following publication of document can only be a selected summary of
the UK Strategy. stakeholder comments and suggestions that
Feedback provided by stakeholders during the ranged across a very broad financial capability
listening phase has been a vital ingredient in and wellbeing landscape.
developing the UK Strategy and our one-year We aim to present a fair and balanced view of
Corporate Plan. It will also greatly inform our what stakeholders told us, including areas
three-year Corporate Strategy. where there was consensus; where there was
We surveyed those who attended the regional disagreement; and where we considered a
roadshows, and received a very positive single comment, or a couple, particularly
response from stakeholders all across the UK. noteworthy contributions to the debate.
Those who took part in the listening phase We hope everyone who contributed to the
appreciated the fact that senior leaders took listening phase will find this document useful
time to listen. They also particularly in understanding the general consensus and
appreciated the opportunity to hear about our response to what we heard.
1
More than 1,000 stakeholders - from a range of
backgrounds including employers, business
groups, policy makers, local government, current
and potential delivery partners, educators, front
line charities and local practitioners - attended
events during the listening phase, and more than
600 pages of written responses were received
from 39 different organisations.
3Core principles
What stakeholders said in the listening phase
Put the customer first struggling’ segments are unable to achieve
financial resilience because they simply do not
A clear and consistent message throughout the have enough money coming in due to changes
listening phase was that both the UK Strategy in work and the economy” (Citizens Advice
and the MaPS Corporate Strategy should start Scotland).
from the needs of customers and the customer
outcomes that we want to affect. Services People in vulnerable circumstances /
should be designed with the most vulnerable in most in need
mind, which would result in services that work
for everyone. As one stakeholder commented, With regard to establishing vulnerability and
“we must put the client at the centre of the most in need customer groups, the key points
service delivery” (Community Advice and Law raised by stakeholders were:
Service).
• Strong consensus that MaPS’ approach to
Outcomes and target customer groups vulnerability should be aligned to the FCA
definition of vulnerability that is generally
While there was considerable comment about understood and accepted. “MaPS should
specific outcomes (for example some align to the FCA’s definition of vulnerability”
respondents questioned the debt advice target (UK Finance).
of 500,000 more people obtaining debt advice), • People can move in and out of a vulnerable
there was relatively little feedback about the situation, and vulnerability can occur
process for prioritising competing outcomes suddenly. “It is not strictly possible to make
and goals. As a result, the MaPS Board has had a clean distinction. Financial capability
to exercise judgement in order to prioritise. efforts should contain an element of ‘risk of
vulnerability’…” (MyBnk).
“MaPS should focus on increasing reach across
• The Money Advice Service’s focus on
money, pensions, and debt guidance and advice
vulnerable groups for debt commissioning
service… any targets set should be made in
was seen as being too narrow, and MaPS
consultation and flexible to the way people seek
was encouraged to ensure that the
advice and the need to continue to improve the
segmentation model address vulnerability
quality of help people get… MaPS should also
more broadly, and not just vulnerability
continue to measure the quality of delivered
relating to low incomes.
and commissioned services… MaPS should set
• Mental health difficulties are seen as a
realistic targets for its impact at a general
leading area of vulnerability. The UK and
population level. In the first instance MaPS
MaPS Corporate Strategies must meet the
should set outcome targets for the population it
needs of consumers with mental health
reaches. In combination with the reach
difficulties across both money and pensions.
measures this should ensure both an increasing
number of people helped with targets that • Economic abuse is widespread – people
MaPS can easily hold itself and its partners to often fall into financial difficulties because
account against” (Citizens Advice). they’re in a coercive / abusive relationship.
• Consider the needs of digitally disengaged
With regard to target customer groups, many customers, especially considering more and
stakeholders urged MaPS to consider the broad more products and services are provided
socio-economic context in which target digitally / via digital platforms.
customer groups are living. “People in the
‘financially squeezed’ and ‘financially
4• MaPS must reach consumers in vulnerable guidance and, where appropriate, advice”
circumstances where they are, through (Barclays).
partnerships with trusted intermediaries and
This approach involves much greater
community groups, rather than expecting
integration of money and pensions guidance
them to come to MaPS. “The best way to
and debt advice. It also means recognising that
reach the most in need and most vulnerable
people aren’t only individuals – they have
is to deliver advice to people where they
relationships with others in families and
need it. That means co-locating, investing in
communities too. All of this can have an
partnerships, and promoting referrals
influence on how people interact and how they
between agencies” (Citizens Advice). “MaPS
deal with money.
cannot reach those most in need or in
vulnerable circumstances by itself because Moreover, while people may initially present
primarily it is a strategic body and not a with issues relating to money or pensions, the
delivery organisation. MaPS needs to work underlying causes might be entirely different –
with existing organisations who are already for example gambling, mental health issues, or
engaged with this demographic…who can the breakdown of a relationship. If we want to
best identify and reach them” (Citizens improve money and pensions outcomes for
Advice Scotland). customers, we have to help people address
• At the same time, MaPS service design must these root causes. This may mean developing
build in the needs of consumers in partnerships, training, better referrals or
vulnerable circumstances. integrating services and support across the
sector.
Treat needs holistically
More prevention
A consistent message from the listening phase
was that money, pensions, debt and financial There was a clear message from stakeholders
education are not totally separate topics – that there is an urgent and increasing need for
people’s lives don’t work like that. Both the UK what some described as “crisis support” (mainly
Strategy and the MaPS Corporate Strategy debt advice).
should therefore offer support across the whole
spectrum of money issues people face, when One stakeholder noted that “more and more
and where they need it. people present to debt advice because of an
unforeseen (and unmanageable) event, or
“[The creation of] MaPS is an opportunity to because their level of income cannot sustain an
commission and support more holistic services” acceptable living standard. MaPS’ ability to
(Citizens Advice). influence these structural socio-economic issues
is likely to be limited. [People coming to debt
“We would encourage MaPS to prioritise a
advice] are well aware of the benefits of having
whole-of-life approach to advice and guidance,
savings to fall back on…but many of them just
in which considerations about short-term
don’t have the means to save” (Money Advice
financial resilience are integrated with long-
Scotland).
term pension saving to achieve good outcomes
over the course of a consumer’s life” (NEST). “Growing numbers of people also need to be
supported right now [by debt advice]. The
“[We] would encourage MaPS to consider the
budget for crisis debt advice needs to be
opportunities for data sharing between advice
sustained at the current level as a minimum or
and guidance providers, such that providers
increased” (The Money Advice Trust).
have more holistic views of client need and can
tailor information and advice appropriately. We At the same time, there was general support for
believe there is significant potential for an API- the view that, in order to truly move the dials
based ecosystem for advice and guidance, and achieve the UK Strategy and Corporate
through which consumers consent to share data vision, a much greater focus on prevention is
with providers in order to receive more tailored required. Improving access to high quality
5financial education, getting better at identifying “MaPS should look to influence the background
people who are likely to fall into debt, and cultural environment of attitudes to investing.
helping people to plan for retirement before it The UK is held back from securing better
is too late, are all aspects of this shift towards financial futures by excessively conservative
prevention. attitudes to investing and a propensity to hold
long term savings in cash” (Hargreaves
“MaPS will fail to achieve its aim of positively Lansdown).
impacting the whole population if support is
restricted to ‘crisis’ work…MaPS should allocate Respect devolution
a higher proportion of its budget to
preventative work…Within the preventative Stakeholders strongly emphasised the
budget there should be a relative move from importance of developing strategies and plans
further evidence gathering and piloting that fit with the different legislative and policy
(although this remains important), towards environments in all the nations of the UK. Even
funding proven interventions that can be where legislation is not devolved, policies and
expanded at scale and with the infrastructure to approaches may vary, and this should be taken
ensure high and consistent quality” (MyBnk). into account. Detailed plans should be
produced and be specific to the conditions of
“As with health services, we believe prevention each nation.
should take priority over cure given the scope to
help greater numbers of people and the limited As one public sector organisation commented,
resources MaPS has at its disposal” (Just “this does mean that [MaPS] needs to be willing
Group). to be sufficiently flexible about differing
priorities and delivery [across the UK]”
Specific recommendations (National Advice Network, Wales).
Specific recommendations that were proposed Similarly in Northern Ireland, the Strategy
by stakeholders at listening events and in should reflect the specific needs of consumers
written submissions included: in Northern Ireland, for example “Northern
Ireland specific baseline figures and specific Key
• Education at the point of taking out credit Performance Indicators (KPI), which seek to
(using behavioural insights or compulsion) have a real impact for consumers in the region”
• Earlier, more sensitive, signposting (Consumer Council NI). MaPS was also urged to
to support continue to have a local presence “to best
understand the specific needs of Northern
Ireland consumers” (Consumer Council NI).
Change the culture
MaPS was also urged to forge close working
Stakeholders encouraged us to help build a
relationships with governments and key
culture of openness where people are much
stakeholders, and to ensure that sufficient staff
more comfortable talking about issues relating
and resources were dedicated to “retaining
to money and pensions with friends and family.
relationships, working closely with and
We were for example urged to consider
influencing…Government and other…national
education campaigns to reduce the stigma of
stakeholders” (National Advice Network,
debt and financial difficulties, to influence
Wales).
attitudes to saving, and to promote planning for
retirement and thinking about pension options. In Wales, the importance of making sure that
strategies, delivery plans and services fully
“MaPS should continue to maintain a public-
embrace the Welsh language was highlighted.
facing element with the aim of increasing the
This would not merely meet legislative
social acceptability and confidence of ‘talking
requirements but also “ensure that any service
about money’ and the public support of
delivery is appropriate and relevant for people
financial education to improve financial and
in a bilingual nation” (National Advice
general well-being” (MyBnk).
Network, Wales).
6Specifically with regard to debt advice, partnership with an external organisation”
stakeholders pointed out that MaPS needed to (Hargreaves Lansdown).
achieve a careful balancing act. “Whilst MaPS
has a responsibility under the Act to have a Go to where people are
national debt strategy it will have to be very Many stakeholders expressed the view that in
careful that the strategy sits lightly enough to order for MaPS to help more people make the
enable the devolved authorities to make their most of their money and pensions, support
own decisions on the appropriate use of the should be embedded where consumers already
funding, without restraint. If it sets a debt go physically or virtually, rather than MaPS
strategy that doesn’t meet the needs of the investing heavily in getting people to go to
different nations in the UK MaPS risks MaPS. “We would encourage MaPS to seek to
irrelevance given that the money already sits work with sectors with existing reach,
with the devolved authorities. So it is very much architecture and consumer touch points to land
up to MaPS to ensure that it does not side-line messages at scale” (UK Finance). This might
itself by not being cognizant of the sensitivities include working with employers (see section
in the devolved nations around this issue” below), housing associations, GPs, retailers and
(Citizens Advice Scotland). others (including hyper-local community based
Stakeholders encouraged us to call the strategy organisations). It might also involve providing
the “UK Strategy” rather than the “National syndicated online content and tools where
Strategy” to avoid confusion. people are already engaging online – for
example through banking, gaming or intranet
Complement rather than duplicate sites. Finally it was also seen as important for
MaPS to develop a local presence, rather than
(This is a core principle relevant to both the UK relying solely on national initiatives.
and Corporate Strategies, but perhaps more
applicable to the MaPS Corporate Strategy). Employers
Stakeholders were very clear in the listening “Creating a culture of financial health at work
phase that MaPS must recognise what is could have a profound impact on outcomes for
already happening in the wider sector and seek consumers” (Association of British Insurers).
to complement and improve on what exists.
Only where there are clear gaps should MaPS “There is substantial potential for MaPS to
seek to create new initiatives. Even then, MaPS improve financial capability by working closely
should first look to define the problem and fund with employers and workplace pension
others to find solutions, before resorting to schemes” (Pensions and Lifetime Savings
delivering services itself. Association).
There was a strong consensus among Employers generally focus on what the law says
stakeholders that MaPS “should not ‘reinvent they must do (for example, auto-enrolment),
the wheel’ and should share effective good whereas staff tend to be more concerned about
practice that works by promoting stakeholders’ borrowing, debt consolidation, building savings,
activities and working in partnerships with and protection.
existing organisations” (Fairbanking Many employers want to provide more help to
Foundation). their staff, but are concerned about over-
“The default assumption should be that for stepping the regulatory boundary. This is
many customer needs, an external solution particularly the case with smaller employers.
already available is likely to be better than There was particular enthusiasm for MaPS to
MaPS building a new one from scratch. There work with and support smaller employers
will always be exceptions, such as the pension around financial wellbeing. “MaPS should invest
dashboard, however a solution delivered by in digital tools and other means to reach the
MaPS is always likely to be more expensive, and small employer community, and help them to
slower to deliver, than one developed in
7find ways to support their staff with both • Develop a peer-support training package
pension saving and broader financial wellbeing” within the workplace (e.g. financial first
(NEST). “MaPS needs to work in partnership aider).
with a wide range of organisations. Employers • Instill a culture of financial wellbeing within
are particularly important here and we think the DNA of the workplace – for example by
more emphasis should be placed on SME developing a framework or charter: “MaPS
employers who now employ 60% of the private should promote a ‘financial capability
sector workforce” (Financial Resilience Task charter’ among employers, committing
Force). employers to funded financial capability
support for their employees” (The Money
Specific recommendations Charity).
Some specific recommendations that were • Improve communications between
proposed by stakeholders at listening events employers and government to boost
and in written submissions included: understanding and take-up of beneficial
policies.
• Create an employer platform to provide • Engage government to introduce tax
seamless access to affordable credit, pay incentives for employers to offer payroll
advances and insurance – and to consolidate saving.
debts, repay loans or build savings (e.g. • Normalise employer reporting on financial
through payroll deduction schemes). wellbeing in annual reports
• Redesign and promote the employer portal
built by MAS but little used.
How we’re responding
Put the customer first More prevention
Customer outcomes are at the heart of the UK The public health model pyramid of prevention,
Strategy. The UK Strategy sets five key early intervention, and crisis support has been a
outcomes, each with a priority measure and a helpful stimulus to our thinking about the UK
2030 National Goal. It also sets out the Strategy. This has raised the question of where
customer groups we believe are most in need the balance lies across the range of total
for each priority measure. provision within the system, and whether MaPS
should focus particularly on any specific level of
We will align the MaPS definition of the pyramid. This latter question will be
vulnerability to that used by the FCA. addressed in the MaPS three-year Corporate
Treat needs holistically Strategy.
We fully agree that customer needs should be Change the culture
addressed holistically in relation to service We have developed five Agendas for Change as
design and delivery, because very often part of the UK Strategy to drive change at scale.
financial issues are part of a complex mix of These are broad campaigns or programmes that
considerations. In practice the priorities of the mobilise a wide range of organisations.
UK Strategy (“Agendas for Change”) will not be
Achieving the ambitious goals set out in the
treated as separate silos. At the same time, we Agendas for Change will have a transformative
felt that it was important to articulate the effect on the culture of financial wellbeing.
strategy by clearly setting out the distinct Moreover, the UK Strategy has a strong focus
customer outcomes that we are driving towards on financial education, and encouraging
in order to achieve the overall financial children and young people to be open about
wellbeing vision. talking about money.
8Respect devolution Complement rather than duplicate
We have named the strategy the “UK Strategy”, MaPS will focus on gaps in provision/networks
rather than the more ambiguous “National and work collaboratively with a wide range of
Strategy”. The UK Strategy has been developed organisations across the sector. This will form a
with a view to making sure that legislative and core theme of the MaPS Corporate Strategy.
policy differences in different nations are taken
into account from the start, and MaPS has kept Go to where people are
national governments fully updated as the work In every Agenda for Change we have identified
has progressed. asks to key partners that will deliver services to
The activation period which follows the where people are.
publication of the UK Strategy will involve the In relation to employers in particular, a
creation of separate and detailed delivery plans challenge group will drive forward the thinking
that are consistent with the overall UK Strategy during the activation period, to establish a
but adapted to the specific needs and “workplace proposition”. The group will
circumstances of each nation. consider: best practice; issues and barriers to
The UK Strategy has been translated into the adoption across the UK workplace; innovations
Welsh language. for driving the five National Goals of the UK
Strategy; how to scale and how to build the
business case; the role of government; and
what support is needed to drive this forward.
9Start young
What stakeholders said in the listening phase
Stakeholders agreed that: schools these should be facilitated by an
educational intermediary. The intermediary
• starting early and involving parents is critical can support the school to make the most of
to providing children and young people the volunteer opportunity to support existing
with a meaningful financial education and provision, but can also support the volunteer
setting them on the path to financial to prepare them for how to engage
wellbeing as adults effectively, create the most impact, and
• too few young people are receiving financial importantly, how to get the most out of the
education experience for themselves” (Young Money).
• and there are huge variations in the quality
and consistency of what is currently being Financial education in schools
delivered.
Positive engagement from government
There was general support for the priorities departments across all UK nations (for example
MaPS proposed for action: including support for the Financial Education
Conference for School Leaders in England, held
• “We absolutely support the importance of in July 2019), indicates strong support for
using both teachable moments and just in financial education.
time education to maximise the impact of
financial education on children and young There is also a strong appetite from teachers
people, however this should not be at the and education professionals to learn from each
expense of schools developing a progressive other and share approaches through
programme of financial education across the professional bodies, unions and other channels.
whole school” (Young Money). There is support from the teaching community
• “We strongly support starting financial for the co-ordination of high-quality teaching
education as young as possible. We feel that resources across financial education. There was
parental influence in early years is crucial, as a perception, particularly at the listening
is consistent provision through primary events, that many educators lack confidence in
education. It is [however] also important delivering financial education, and that this was
that focus on secondary education…is not an important area of focus for the future,
forgotten” (Young Money). This was echoed perhaps by encouraging and promoting
by other stakeholders: “In scaling up, the ‘teacher evangelists’ who do have the
core secondary school programme should confidence to speak about the topic.
play a key role. We suggest this be added
explicitly to the list of priorities” (The Money At the same time, concern was expressed that
Charity). The need to maintain momentum support for the principle of financial education
in financial education throughout the years did not seem to have translated into a
of schooling was a common theme echoed significantly increased focus on the topic in the
by stakeholders attending the listening classroom. One stakeholder suggested that
events. MaPS would need to “advocate with
• “We see the use of industry experts as a government, parliament and civil society with
hugely valuable way of engaging young UK educational authorities including DfE and
people in real life experiences of the financial Ofsted. To build the case for financial education
services sector and making effective use of we suggest that MaPS emphasise the need for
expert knowledge and experience…To make financial education to have a clear ‘home’
the most of volunteer opportunities within within PSHE and a designated responsible
leader within the school” (MyBnk).
10Moreover, it was remarked that “the absence of Other specific recommendations
[a] plan within the UK education system to meet
the targets MaPS is setting needs to remedied if Some specific recommendations that were
these goals are to be met. It is important to proposed by stakeholders at listening events
know what is expected from each contributor and in written submissions included:
(public and private) and how all the
contributions fit together to achieve the goals” • Influence the Ofsted Inspection Framework:
(MyBnk). “The way to bring financial education centre-
stage in schools is to require it to be
Home and community settings examined and inspected, so there are actual
consequences of not providing learners with
While it was agreed that schools are the place effective financial education” (The Money
to start, the importance of non-school settings Charity) – “[this] could be a game changer in
was also highlighted in relation to new legal how schools treat the subject” (MyBnk)
requirements of local authorities to provide • Develop an over-arching framework that
financial guidance to care leavers and to creates cultural change, embedding financial
prevent homelessness. In addition, as education across all school ages.
numerous participants at our roadshows noted, • ‘Auto-enrol’ children and young people into
some of the young people most in need of a basic bank account / savings account.
support are not engaged in the school system,
• Find ways to harness the influencing power
so an exclusive focus on financial education in of social media (including to talk about
schools would not reach or engage them. digital money topics) – this was a common
Funding and the case for financial theme across the listening events.
• Use young people as ambassadors to
education
promote the importance of financial
In relation to the challenge of how we can fund wellbeing.
financial education, “MaPS needs to support • Collaborate with UK Finance and others to
programmes that can be scaled to engage a ensure accessibility for all children and
significant proportion of the UK population. This young people to bank accounts and saving
means facilitating and supporting sustainable products.
funding to up-scale financial education in • Coordinate a plan for maturation of Child
schools. A cross government departmental Trust Fund for first cohort of young people
effort with the Department for Education, (September 2020).
incorporating Ofsted and HM Treasury • Seek to influence policy priorities
supported by private sector funding” (MyBnk). appropriate to the specific circumstances of
It was suggested by other stakeholders that each UK nation (e.g. ensuring participation
MaPS should focus on improving awareness and in the OECD PISA financial literacy test,
uptake of existing scale programmes and encouraging addition of financial education
supporting providers of those programmes to in the primary school National Curriculum,
fill gaps in provision. “Key to this is supporting collaborating with DfE to ensure all T-levels
marketing of resources to educators and contain a financial education element)
helping educators understand how financial (Young Money).
capability can be embedded in a wider range of
subjects beyond maths and PHSE” (Barclays).
The need to build a compelling case for the
wider benefits of financial education was also
made by stakeholders. “Unless we are able to
show the benefits of embedded, high-quality,
financial education to…stakeholders there will
remain children and young people who are not
effectively reached” (Young Money).
11How we’re responding
We have developed a ‘Financial Foundations’ infrastructure of networks, tools and
Agenda for Change in the UK Strategy. Its aim is frameworks
to make sure that children and young people • Communicate and engage with educators,
get a meaningful financial education, so that parents and community services to promote
they become adults able to make the most of practical opportunities for children to learn
their money and pensions. This builds on the more and gain valuable experience in
comprehensive Commissioning Plan for managing money.
Children and Young People developed by the
Money Advice Service in 2018. MaPS’ immediate focus will be to bring
together influential and relevant stakeholders
In particular it will focus on three areas: and partners. They will be set the UK Strategy
challenge of how to make sure that 2m more
• Schools and further education colleges – we children and young people receive a meaningful
want more teachers to have the confidence, financial education. They will also consider
skills and knowledge to teach financial specific, short and medium-term proposals such
education. We also want more schools and as:
colleges to be able to deliver memorable
financial education, to different year groups, • Planning a new collaboration on financial
as part of a coherent ‘whole school’ education between UK Finance and MaPS.
approach. This will involve bringing together financial
• Home – how parents show, teach and talk services firms to develop shared priorities
about money has a huge influence on that secure high-quality learning about
children. We want more children to get money for all children and young people.
experience and responsibility for managing • Developing a collaborative pocket money
money at home. This includes opportunities campaign to reach children and parents,
for spending and budgeting (such as using a focusing on giving children and young
bank account). Every child should receive or people more responsibility for their money
handle money regularly, even if only a very and opportunities to make age appropriate
small amount. money decisions.
• Community – extra help is needed to make • How to further develop MaPS’ existing work
sure children in more vulnerable on three ‘pathfinder’ projects that increase
circumstances get a meaningful financial the scale of financial education. These
education. This means targeted support for pathfinders will build more evidence and
children in care and leaving care, young experience where we know the biggest
carers and disabled young people. We want impact can be made. They fill gaps in
to see leaders of organisations that work provision for parents, teacher-training and
closely with children and young people support for 16- to 17-year olds.
trained and supported. They can then
deliver effective financial education for Some stakeholders were keen for MaPS to act
children and families. as a vocal advocate with Government
departments. Lobbying is not within the remit
We believe that priorities for the UK Strategy of MaPS. But we do see it as our role to
Financial Foundations work are to: collaborate with DfE and devolved nations, to
move forward the financial education agenda in
• Boost funding from a range of sources into an impactful and sustainable way, including
evidence-based approaches to financial advising on where the evidence points in policy
education development.
• Scale up effective financial education
solutions by providing a supportive
12Put savings first
What stakeholders said in the listening phase
There was broad agreement from stakeholders should be seen as both short- and long-term
that “not enough people are saving and do not saving (to include saving for retirement through
have enough financial resilience as a result” pensions). Other stakeholders pointed out the
(Pensions and Lifetime Savings Association). importance of protection products that help to
safeguard income, mitigate the impact of
The importance of building up a liquid savings shocks such as serious illness, bereavement or
buffer and developing a regular savings habit redundancy and generally improve financial
was agreed on by stakeholders, especially as resilience.
this has a positive knock on benefit for other
customer outcomes and on overall financial Other specific recommendations
wellbeing. “A lack of financial resilience causes
misery for thousands of households across the • Encourage policy change towards savings
country. An inability to cope with income shocks auto-enrolment: “Similar nudge-based
or unexpected bills can lead to a debt spiral and approaches [to pensions auto-enrolment]
severe financial detriment” (Association of can help some of the population to save,
British Insurers). Saving provides some making them more resilient when a crisis
resilience when financial shocks happen to happens, thus freeing up resources for those
individuals so it is less likely they will need to most in need” (Citizens Advice Scotland).
seek debt advice. • ‘Pledged Savings Accounts’ are a useful tool
to promote savings – this is where an
Some stakeholders made the point that savings individual taking out credit also commits to
and credit are closely related, and that savings saving at the same time.
How we’re responding
We have developed an Agenda for Change in we still believe that the overall call for a regular
the UK Strategy to build a ‘Nation of Savers’. Its savings habit is the most important message.
aim is to make sure that people get a savings
habit, build cash reserves to help with In particular the UK Strategy ‘Nation of Savers’
short-term emergencies, and have a clearer work will focus on four areas:
future focus in their financial lives. • Getting more people to save every or most
We recognise that savings and credit are often, months.
but not always, closely linked. So this strategic • Encouraging changes in websites, apps and
priority (Agenda for Change) is closely other systems that people use daily to make
connected to the ‘Credit Counts’ Agenda for saving simpler. We want it to be much easier
Change. It is also linked to the ‘Future Focus’ to put money into savings, no matter how
Agenda for Change, which focuses on planning small the amount, and for people to have to
for, and in, later life – although getting people think twice about taking it out.
to save into very long-term products, such as • Encouraging more people to engage with
pensions, requires a different set of enablers the future as saving requires. We want them
and measurements. to be confident that saving is worthwhile
and secured by the financial system.
We do not ignore the fact that for many people, • Changing the national conversation, so
insurance and life assurance products are the saving is seen as valuable and attractive. We
only things that can protect them against also want to focus that conversation on
catastrophic, rather than small, risks. However, banked savings, rather than on
13money-saving tips. Otherwise, money saved to get a savings habit. Over the long-term in
tends to be spent on other items. the national media, we want to persuade
influencers to start focusing on the habit and
We believe that priorities for the UK Strategy value of banking savings, rather than
are to: spending them elsewhere.
• Achieve a game-changing shift in the ease of • Encourage Government initiatives focused
saving (money in the bank) driven by on savings. Help to Save is a major initiative
automation, integration and technology. for people on low incomes. Six million young
Changes to systems could make significant adults will have access to savings from the
differences to the rates of saving by former Child Trust Funds over the next
providing nudges and even auto-enrolment seven years. Both provide infrastructure that
schemes. One of the most significant areas is can extend the reach of a savings habit into
payroll savings. The ‘sidecar savings’ field new sections of the population.
trial, co-funded by MaPS and JP Morgan and MaPS’ immediate focus will be to bring
delivered by NEST Insight, is central to our together a group of influential and relevant
thinking on automated savings. This concept stakeholders and partners. They will be set the
of a savings buffer being built up by people UK Strategy challenge of how to make sure that
auto-enrolled in pensions savings seems
2m more ‘struggling’ and ‘squeezed’ people
promising. If evidence demonstrates it has a save regularly. The group will also consider
positive impact on financial wellbeing, it specific, short and medium-term proposals such
could be adopted voluntarily by employers.
as:
It could even be taken up as a development
in law and policy. This could bring about • Greatly increasing the scale and take-up of
massive change that is easy and manageable payroll saving schemes. If employees opt to
for millions of working people. have their savings deducted from payroll at
• Develop a sector-wide programme, including source, it is easy for them to get the habit.
multiple forms of messaging direct to Although payroll deducted savings are
consumers, to promote a savings habit and available, take-up is low. We would like to
say why it is valuable. This could occur at explore proposals to bring this offer to
many levels. The rollout of the Standard hundreds of thousands more employees
Financial Statement in debt advice, with its within two years.
savings element, is a good example. This is • Planning an impactful social campaign. What
challenging the idea that people who are is the 10-year plan to change the national
overindebted don’t have the capacity or will conversation about savings in the media?
14Make the credit market
work for everyone
What stakeholders said in the listening phase
Many stakeholders broadly welcomed the approach aligns to regulatory interventions
proposed focus on making the credit market around persistent debt and high cost credit.
work for everyone. Further, MaPS will need to ensure its messages
reflect that customers may be using credit for
At the same time, some organisations, sound reasons (e.g. to iron out uneven
particularly those involved in providing credit, income/expenditure), or because they have no
emphasised the need for a more nuanced other option and in reality need debt advice”
understanding of the varied reasons consumers (Barclays).
use credit; an appreciation that credit may, in
certain circumstances, be the most appropriate Support a broader role for credit unions
product solution; and careful positioning of
proposed solutions. Credit unions have a higher policy profile with
devolved governments as well as higher
“Credit is a legitimate way for individuals and customer numbers as a percentage of the
householders to smooth income and population than is the case in England. At the
expenditure….In addition to tight budgets, there same time, credit unions face strong
are many other reasons why customers may use competition from firms offering better headline
credit on a regular basis. Credit can be rates, incentives and/or eligibility criteria on
beneficial to individuals who can borrow money loans, insurance or savings products. They also
to buy goods such as a car or white goods when struggle to engage employers on
they are needed, using credit to smooth their loan-repayment or savings payroll-deduction
income. Customers may also use credit when schemes.
they want to avoid digging into savings which
are for a specific purpose. As a result of Some stakeholders felt that MaPS should take
increasing flexibility in labour markets and new steps to support credit unions, for example to
ways of working, not all individuals receive their help:
income in the same way…Increasing numbers of • Engage employers about the benefits of
consumers have lifestyles based on uneven
financial wellbeing, in particular for
earnings and access to different types of credit
frictionless payroll deductions for loan
products is needed to meet their needs. The
repayments and savings.
alternative for some consumers might be no
• Improve customer journeys for affordable
credit available to them. Inability to access
credit and insurance and for savings
credit can push consumers into avoidable debt.
schemes.
Given that a proportion of customers are in a
• Persuade the FCA and government to allow
situation where their finances are stretched to
credit unions to expand the range/supply of
the limit, an objective of increasing saving and
their product offer to consumers (for
reducing the use of credit for everyday spending
example to offer secured loans or
is unlikely to be realistic or achievable in the
mortgages).
short-term” (Consumer Finance Association).
“MaPS will need to work closely with the FCA
around inappropriate credit use to ensure its
15How we’re responding
We have developed a ‘Credit Counts’ Agenda and partners. They will be set the UK Strategy
for Change in the UK Strategy. Its aim is to make challenge of how to make sure that 2m fewer
sure that more people access affordable credit, adults use credit for everyday essentials.
and that more people make informed choices
about borrowing. They will also consider specific, short and
medium-term proposals such as personalised
In particular it will focus on four areas: payment schedules in social housing. How we
can build on the Rentflex concept? (This is the
• Making new forms of low-cost credit proven principle of a personalised schedule for
available in the market, and making existing social housing costs, offered alongside free
forms of low-cost credit more accessible. financial guidance). Could we develop proposals
• Focusing consumer interfaces with credit for scaling it to hundreds of thousands of
more on repayment, the total cost of credit, tenants within two years? And how could the
and building in elements of savings and principle be seeded into the private rented
budgeting. sector, student accommodation marketplace,
• Helping consumers to become more mindful and other sectors, such as utilities and Council
about the pros and cons of credit, and Tax, that serve our target audience?
savvier shoppers on price.
• Encouraging creditors to support borrowers Fair4All Finance has been set up to increase the
more, through a wider range of financial resilience and wellbeing of those in
interventions at an earlier stage when bills vulnerable circumstances in England and Wales.
and commitments are missed. The initiative makes suitable, affordable
financial products and services readily available,
We believe the priorities for the UK Strategy with a focus on increasing access to affordable
‘Credit Counts’ work are to: credit. Fair4All Finance are creating a sector
• Continue to support advances made by the Theory of Change with stakeholders. During the
FCA to protect consumers from harmful activation period, Fair4All Finance will develop
a detailed action plan with stakeholders to
lending practices, in particular those in
vulnerable circumstances as we understand deliver the key outcomes identified. MaPS will
more about their lives. support this exercise, and will look in particular
at how awareness of credit choices and suitable
• Use technological advances to design
debt advice can be developed to support the
products to better support the needs and
delivery of outcomes in the Theory of Change.
preferences of consumers and their choices
and behaviours. This will help drive longer With regard to credit unions, we will encourage
term financial wellbeing. them to contribute to the goals of the UK
• Increase consumer awareness of the options Strategy, in particular in relation to achieving a
they have. Choices need to be presented credit market that is fair, sustainable and
more clearly, making decisions easier. affordable.
• Increase availability of affordable credit
choices. This will make a significant Some stakeholders felt that MaPS should
difference to the financial wellbeing of those actively lobby Government departments to
in the most vulnerable circumstances in highlight the impact of policies such as universal
society. credit and wider austerity measures are having
in relation to credit use. However the MaPS
MaPS’ immediate focus will be to bring Board is clear that lobbying is not within the
together influential and relevant stakeholders remit of MaPS.
16Make debt advice work better
for consumers and funders
What stakeholders said in the listening phase
Debt advice is a key priority Balance requirements for volume and
“MaPS main priority must be supporting people
quality
in crisis-need to get debt advice when they need Stakeholders felt that in relation to debt
it, in addition to the MaPS pension work…we services it funds, MaPS put too much emphasis
know that debt advice works and helps to on numbers and not enough emphasis on the
improve people’s financial capability, that there quality of interactions and the types of clients,
is currently considerable unmet need and that and that as a result there were unrealistic
the future outlook is that more people will find targets for funded organisations, and excessive
themselves in financial difficulty. With existing pressure on individual advisers already dealing
with benefits changes, regulatory and other
services at capacity, it is important that there is
requirements, and the immediate and often
a safety net there for everyone who needs it
complex needs of clients.
now. To achieve the needed increase in
capacity, MaPS must focus on supporting “We urge MaPS to avoid getting caught up in a
collaborative working, building on existing numbers game as they seek to demonstrate an
expertise and investing in shared technology” increase in outputs” (The Money Advice Trust).
(The Money Advice Trust). A more collaborative approach to setting
“…the demand for debt advice is and will targets and managing performance was urged,
as well as greater focus on customer outcomes
remain high in the foreseeable future and the
rather than volumes.
provision of debt advice must remain a top
priority” (Community Advice and Law Services). Many stakeholders felt that MaPS should focus
on quality and impact, rather than total
Intervene early numbers of people reached by debt advice.
MaPS was asked to give greater trust to debt
Stakeholders agreed that the UK Strategy
providers, and to introduce longer term
should encourage organisations to identify and
sustainable funding that reflected a more
support people before they get into debt. A joined up approach, so that frontline providers
utility company for example highlighted their could offer holistic support and address the
work to identify customers who they believe root causes of debt problems as well as
are on the verge of getting into debt, as well as presenting issues.
helping customers already in debt and fuel
poverty. Improving collections practices
“Consumers need to be encouraged to seek debt Stakeholders highlighted the need for a change
in practices of local councils so that they looked
assistance as early as possible, as evidence
to provide help and referred to debt advice
suggests that early intervention generates the
when people fall into arrears, rather than
most effective and sustainable benefits to referring immediately to bailiffs. There is also a
consumers, creditors and our wider society” significant cross-departmental agenda to
(Gregory Pennington Ltd, part of Think Money improve Central Government debt collections
Group). and enforcement practice, led by the Cabinet
Office.
17Creating a sustainable long-term Other specific recommendations
model, and broadening the funding Some specific recommendations that were
base proposed by stakeholders at listening events
There was broad agreement on the need to and in written submissions included:
evolve the funding model to ensure all creditors
• Engage with employers and with other
play a fair and reasonable role. organisations who see people who may be in
“MaPS’ key priority must be establishing an financial difficulty presenting with other
equitable and sustainable model for funding issues (e.g. GPs).
• Leverage technology, social media and
free debt advice” (Finance and Leasing
influencers (e.g. Martin Lewis) to
Association).
disseminate the right messages and tackle
“MaPS should focus on broadening the funding the stigma around debt and talking about
for debt advice and ensure that the burden of money issues generally.
funding does not fall primarily on financial • Enable delivery organisations and
services firms” (Consumer Finance Association). practitioners to make choices and decisions
about service and quality (for example
“Debt advice delivers financial benefits for allowing organisations to offer light-touch
creditors outside of the financial services sector, interventions where they feel that would be
and their contribution to the cost of providing more impactful for consumers).
advice should a factor of funding • Proactively send sensitive letters when
discussions…MaPS should look to build a more people are starting to fall into difficulty,
holistic funding model that reflects drivers of signposting where they can get help.
• Discuss the funding challenges with the CEOs
demand for debt advice and broadens funding
of key firms, and/or with member
base” (UK Finance).
organisations via trade bodies, with a view
“The current funding settlement for debt advice to encouraging an increase in voluntary
is inadequate; it does not provide for sufficient funding for debt advice in the short term. If
capacity in the sector and the funding that it additional voluntary funding isn’t
forthcoming, MaPS and Government should
does provide is too narrowly drawn from
consider other options.
financial services, failing to reflect that demand
• Consider engaging independent consultancy
for debt advice is often driven by other
support to help design long term funding
sectors…MaPS should work with HM Treasury, options for debt advice. This might include
Department for Work and Pensions and the basing funding on measures of impaired
Financial Conduct Authority to create a new lending/arrears, or harnessing funding
funding settlement which increases available mechanisms for SDRP.
funding and, critically, broadens the funding • Develop mechanism (with published
base to all sectors who drive demand for debt metrics) to establish whether debt advice
advice” (Barclays). given is effective or provides value for
money.
• Introduce a standard debt qualification for
advisers.
How we’re responding
We have developed a ‘Better Debt Advice’ receive high quality debt advice when they
Agenda for Change in the UK Strategy. Its aim is need it, because of stronger and earlier
to make sure that people can access and
18engagement, and because funding, supply and adequate training, development and good
services more closely match need. practice sharing.
• Reduce the number of customers needing
In particular it will focus on five areas:
debt crisis support in the long run. This
• Bringing supply and demand closer together. requires shifting the negative culture around
Delivering on the direction set by the seeking advice to a positive one, and
Wyman Review, to ensure that debt advice delivering preventative measures set out in
is available to more of those who need it, the UK Strategy. It also requires better
underpinned by a fair and sustainable designed services, built around more
funding model. rounded advice, including enhanced money
• Ensuring everyone who seeks help gets high guidance and onward referrals from debt
quality advice, and there are appropriate advice to help people deal with other
options for every person advised, including underlying issues. Promoting creditor good
those whose essential expenditure is higher practice in supporting those at risk of, or
than their income. experiencing, financial problems, will also be
• Building on the Breathing Space scheme, needed.
making it the norm to get help with debt MaPS’ immediate focus will be to bring
problems. Ensuring that more customers together a group of influential and relevant
seek or are referred into appropriate stakeholders and partners. They will be set the
support at an earlier stage. UK Strategy challenge of how to make sure that
• Developing and implementing a sector-wide 2m more adults can access debt advice. The
approach to data, evidence and reporting. group will also consider specific, short and
The aim is to reduce duplication, enable a medium-term proposals such as:
coherent understanding of impact, and
foster improvement at all stages of the client • Developing a set of recommendations for a
journey. new funding model. A joint Financial
• Encouraging progressive creditor practices. Conduct Authority/MaPS taskforce will
The aim is to encourage creditors to design produce a set of recommendations on a
products and services in a way that reduces fairer and more sustainable funding model –
the likelihood of over-indebtedness seeking input from the sector throughout
occurring in the first place. And for it to the process.
become the norm for creditors to make • Setting out how to deliver the new debt
effective referrals to debt advice and engage advice target operating model, including
collaboratively with the debt advice process establishing action plans for the elements of
when people do fall into arrears. the PACE model that haven’t yet been
mobilised. The PACE model will be built and
We believe that priorities for the UK Strategy delivered in collaboration with the debt
‘Better Debt Advice’ work are to: advice and creditor sectors, and will put the
client at the heart of services.
• Implement the target operating model
• Working with HM Treasury and the
agreed with the sector in late 2018 through
Insolvency Service, we will ensure that this
sector-wide infrastructure and approaches.
Agenda for Change aligns with Breathing
These will include PACE (Piloting Adviser
Space and the Statutory Debt Repayment
Capacity and Efficiency), the Breathing Space
Plan.
scheme and the move to a more sustainable
long-term funding model. • Measuring the need for debt advice. This is a
complex task, different from assessing
• Ensure a coordinated, coherent plan for
supply or demand. Different measures and
delivery across the sector.
opinions exist across the sector. MaPS will
• Keep and recruit the required skills in the
undertake a major review of all the available
sector. This includes making sure that being
statistics and make recommendations to
a debt adviser continues to be an appealing,
share with the sector.
aspirational profession, and providing
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