Lunchbreak sessions to tackle financial skills

Lunchbreak sessions to tackle financial skills

The Financial Services Authority will today set out a five-year plan targeting four million people in a new strategy to improve personal financial skills by reaching out to the workplace.

Workers will be offered one-hour educational seminars at lunchtime or after work, run by trained professionals, which will focus on budgeting, borrowing, saving and investing, plus the company's own employee benefits package.

The scheme follows a "financial capability" pilot project involving 20,000 workers at Centrica, Lloyds TSB, Stagecoach and Heart of England NHS Trust.

At each organisation workers were given a pack with a range of financial information and asked if they would like to attend a seminar. Around 1,000 came to the advice sessions, held in groups of 10.

The FSA will send the packs to four million employees at companies both large and small and is hoping up to 500,000 people will attend an advice session.

The FSA said that costs will be kept to a minimum by encouraging personnel from large financial companies to host the seminars. But FSA chief executive John Tiner insisted that the sessions will not become simply an opportunity for commission-led sales agents to plug products. "The advisers will be paid for by the financial services industry but will be prohibited from selling products at the seminars. They will be provided as a coordinated package with employers. In part it will be about coordinating what is already happening in.....continued below

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some workplaces."

But employees who express an interest in a personal follow-up meeting will be offered a "regulated consultation with a financial adviser" at which product sales will be permitted.

The potential for millions of FSA-provided sales leads has prompted many large firms of advisers and product providers to sign up to the scheme. Abbey, HBOS, Lloyds TSB and credit card group MBNA all took part in the pilot and many others are expected to join. Trade unions are also expected to participate through the work of Union Learning Reps.

The FSA said it will commit £10m a year to sponsoring the scheme at companies across Britain for the next five years.

It is part of a seven-point programme to tackle financial capability launched today by the FSA following its study into the nation's personal finances.

The research found worrying levels of financial literacy and capability centred around 18- to 40-year-olds. It found that 70% of people have no meaningful savings and 42% had no company or private pension provision, with younger workers in the worst position following the closure of company schemes.

Mr Tiner said: "The under-40s face a considerably more demanding environment than their parents did, and consequently can ill-afford to make mistakes or ignore the need to take action. This programme will see financial education, information and advice reaching further into UK schools, universities and colleges, the workplace and organisations that help young, and often excluded, adults."

The City watchdog boss even laid bare the difficulties his own 19-year-old daughter has suffered grappling with her first financial products as she began university. "She rang me after getting a £25 penalty charge which was added on to her credit card. It turned out she hadn't understood that you had to pay at least the minimum amount off each month."