Listening Phase Report - Money and Pensions Service - Summary of discussions with stakeholders about our evidence base, priorities and ambitions ...

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Listening Phase Report - Money and Pensions Service - Summary of discussions with stakeholders about our evidence base, priorities and ambitions ...
Money and Pensions Service
 Listening Phase Report

Summary of discussions with stakeholders
about our evidence base, priorities and ambitions

                                  1
Contents
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

                                                                             2
Executive 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.

                                                    3
Core 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

                                                     5
financial 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).

                                                     6
Specifically 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

                                                     7
find 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.

                                                    8
Respect 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.

                                                    9
Start 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).

                                                       10
Moreover, 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).

                                                     11
How 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

                                                   12
Put 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

                                                     13
money-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?

                                                  14
Make 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

                                                     15
How 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.

                                                    16
Make 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.

                                                      17
Creating 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

                                                      18
engagement, 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

                                                   19
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