Building consumer self-reliance for savings and protection
Over reliance upon the state for pensions and disability benefits has meant that a large part of the UK population has inadequate pensions and savings and is unprepared in the event of long-term sickness or disability. The State is finding itself increasingly unable to finance social benefits from taxation raised from the working population. At the same time, many consumers, especially those in lower income and younger age groups, appear alienated from the insurance industry. This has led to around 50% of the UK population having no life cover and another 50% not being members of a pension scheme.
A lack of understanding of how financial services work and can benefit consumers is a contributory factor in leaving many people disengaged from the insurance industry. Many people struggle to understand financial terminology and find it difficult to understand the cost and benefits of saving for the future and protecting themselves against financial hardship.
The Money Advice Service
The Money Advice Service was launched in April 2011 to help to address some of these issues and to help people to manage their money better, including offering a financial health check tool. Its role is to give clear, unbiased money advice to help people make informed choices. This is a free, independent service set up by government and funded by a levy on the financial services industry. Advice and information is available online, over the telephone and face-to-face and includes information relating to issues such as the forthcoming auto enrolment pension changes.