TISA calls on the Government to work with financial services firms to provide financial guidance to consumers
TISA, the investments and savings membership association, has responded to the Government’s consultation on the public financial guidance review, and believes that the single financial guidance body (SFGB) should work closely with financial services firms to collectively provide consumers with the financial guidance they need.
TISA’s members believe that a single financial guidance body working in conjunction with the private sector could help to address the chronic economic crisis of under-saving which currently faces the UK. The facts are that:
• One third of UK households have no savings at all, and 66% have £1,500 or less
• 40% of adults are not in control of their finances, leading to high levels of debt, low levels of saving and financial insecurity through their working life and retirement
• Auto enrolment (“AE”) has been a success in increasing the number of people saving for retirement however, six million employees fall outside of the scope for AE and a 4.5 million self-employed are not covered by the scheme – representing one third of the private sector workforce
• For those saving into a pension, the vast majority are saving too little and as can be seen in our research- “Can housing wealth save the day?”* future retirement incomes are between 25 per cent and 50 per cent of today’s pensioners
TISA believes that such a body (SFGB) should focus on financial education, help those in debt, encourage short, medium and long term savings to enhance financial resilience plus protect consumers from scams and fraud. It should provide robust governance over the provision of a public guidance service and ensure efficient deployment of resources. However, to be effective in this role, the SFGB needs to work closely with the private sector to ensure that consumers experience consistent guidance journeys, use similar terminology, employ generic rules of thumb and result in broadly the same guidance outcomes. TISA believes that there also needs to be links between the SFGB and services that provide the ability for consumers to action the guidance they have received.
Charles McCready, Director at TISA said:
“Financial guidance must be made accessible to everyone, with particular attention paid to how these services are provided to the elderly and more vulnerable. There is a nationwide savings gap which needs to be addressed through greater awareness of the importance of long-term saving, improved accessibility and guidance that covers the full range of consumer needs.
“The Money Advice Service, The Pension Advisory Service and more recently, PensionWise have provided valuable guidance to consumers and encouraged higher levels of saving, both for retirement and to provide resilience against the life emergencies. We believe that their services should be consolidated into a single financial guidance body for greater consumer clarity and engagement.
“Our recommendation is that this should be delivered through multiple channels such as face-face, call centres and online support and achieved through working with both the private and public sector to ensure a consistent consumer experience underpinned by the latest relevant technology and products. The SFGB should also co-ordinate their services with other strategic initiatives including Auto Enrolment, Pensions Dashboard, Portable Fact Finds and Digital ID so that the consumer experience feels integrated and easy to use.
“TISA agrees with HMT and DWP that consolidating the Money Advice Service, The Pension Advisory Service and PensionWise into a Single Financial Guidance Body presents a great opportunity to provide a step change in the way that guidance services enhance consumer engagement. We hope to work with the Government on the creation of such a body and delivering guidance to the mass market alongside the financial service firms keen to offer such services.”
Ends….
* ‘Can housing wealth save the day? Recommendations for helping consumers plan for retirement’ by TISA available here
For further information please contact:
Alistair Kellie – Telephone: 0207 680 6558 / Email Alistair.Kellie@newgatecomms.com
Sara Neidle – Telephone: 020 7680 6550 / Email Sara.Neidle@newgatecomms.com
Jessica Hodson Walker- Telephone: 020 7680 6538 / Email Jessica.HodsonWalker@newgatecomms.com
Email: TISA@newgatecomms.com
Notes for Editors
TISA is a unique, consumer focused membership organisation. Our aim is to improve the financial wellbeing of UK consumers by aligning the interests of people, the financial services industry and the UK economy. We achieve this by delivering innovative, evidence based proposals to government, policy makers and regulators.
TISA’s growing membership comprises over 160 firms involved in the supply and distribution of savings and investment products and services. These members represent all sectors of the financial services industry, including asset managers, insurance companies, fund managers, distributors, building societies, investment managers, third party administrators, FinTech, consultants and advisers, software providers, financial advisers, pension providers, banks and stockbrokers.
Current themes of TISA policy work include:
• Brexit: developing proposals for government that will enable the savings and investments sector to prosper on a global scale
• Digitalisation: a digital identity for consumers of financial services, innovation, standards and data responsibilities
• ISA’s: LISA, simplification of the regime
• Retirement saving: the Auto Enrolment review, self-employed and pension tax relief
• Housing: the use of property to supplement retirement income
• Guidance: developing a framework and services to make guidance more widely available
• Education: supporting the education of young people to make them aware of the impact of finance on their life.
TISA also provides support on a range of operational and technical issues targeted at improving infrastructure and processes, standards of good practice and the interpretation and implementation of new rules and regulations. TISA has a successful track record in working cooperatively with government, regulators, HMT, DWP and HMRC to improve industry effectiveness by reducing cost and risk and to enhance customer outcomes. This work currently includes: MiFID II, CASS, the UK Fund Settlement initiative and Payments Strategy Forum. TISA Exchange (TeX) is providing a model for transfers and re-registrations.
Website: www.tisa.uk.com