Thirteen recommendations for the Money and Pensions Service (Maps) have been laid out in an independent report to address the “urgent” financial wellbeing implications of the coronavirus pandemic on Britons.
Building the UK's financial wellbeing in the light of Covid-19 - published yesterday (15 October) by Maps' challenge group chairs - outlines immediate actions for the most severely impacted savers.
These include immediate help with credit for people coming out of payment deferrals, no-interest loans for people unable to access affordable credit, and essential financial skills training for young people.
The report comes as part of Maps' UK national strategy for financial wellbeing - announced last January - and sees the government body recommend businesses, the government, and the wider financial services industry "work together to take action in order to help lessen the continuing impact of the crisis".
The independent challenge groups - which advise Maps and have made the recommendations -each cover topics including the use of credit, gender and financial wellbeing, long-term savings, and mental health and financial wellbeing. They are chaired respectively by Ipsos Mori chief executive Ben Page, Lloyds Banking Group managing director of workplace savings and distribution Jackie Leiper, Legal & General Investment Management head of defined contribution Emma Douglas, and Mind UK chief executive Paul Farmer.
Speaking on a panel at the Pensions and Lifetime Savings Association's (PLSA) annual conference yesterday, Maps director of strategy and insights Sarah Poretta said: "A fundamental part of our strategy has to be about how we harness the power of organisations, all across the UK to pull together and do this together, and our strategy is not just about improving people's skills and capabilities, it's not just putting the onus on the individual to improve and learn.
"Maps is here to ensure every person feels more in control of their finances throughout their lives, from pocket money right through to pensions [and] well-being is really important."
She continued: "This goes beyond simply helping people to make better financial decisions, good financial wellbeing has positive impacts on people's health, relationships and work, and is central to people being able to live and fulfil their potential."
The challenge groups' recommendations for Maps have four themes:
- Seizing the moments that matter in people's lives - focussed on a programme of immediate awareness raising for groups especially affected by the Covid-19 crisis, and then testing and learning from its approach for a future medium and long-term campaign.
- Supporting the vulnerable - helping the specific disadvantaged groups whose circumstances have been amplified by the Covid crisis.
- Credit and debt - credit is a lifeline for financial wellbeing, but if it mounts too much, over-indebtedness can become a difficult consequence.
- Recommendations for government - there are excellent initiatives already in place and the report recommends continuing, expanding, and speeding up this good work.
"We're also looking at systems change so how can we improve the system, so they reduce barriers to financial wellbeing; pensions auto-enrolment is a great example of what I mean by this," Poretta said.
"Covid-19 is a physical and health wellbeing crisis and will continue to have unprecedented impacts on people's financial wellbeing. The immediate impacts are obvious, but the longer-term impacts are starting to show too, such as the impacts on pensions and long-term savings."
Maps head of pensions policy and strategy Carolyn Jones said the service had seen a significant drop off in use since the start of the pandemic.
Also speaking on the PLSA's panel, she said: "As we went into lockdown people had other things to consider, and we're beginning to see just what the impact of Covid-19 is on people's relationships with their pensions. We're seeing less people talking to us about taking their pensions than we usually would at this time of the year, but we are see seeing people considering pensions as an immediate source of income due to money worries."
The Investing and Saving Alliance head of retirement and challenge group member Renny Biggins said: "Clearly, Covid-19 has had a huge impact on the finances of individuals and households. No-one could have predicted where we are at, however a successful delivery of the UK strategy will help to equip individuals with the knowledge to make informed choices and understand the support services that are available."
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