You can take a horse to water...
It’s good to see that in the corridors of power people are finally starting to recognise that there is a real need to start educating people about money.
This week saw the publication of a report commissioned by the Treasury into this very subject. It has proposed the introduction of a national personal finance service that will be on hand to offer financial advice online, over the phone and even face to face with branches on the high street.
I personally think this is a great idea. And, I agree with the report’s author, Otto Thoresen, when he says that financial education is as relevant in the 21st century as eating healthily and keeping fit – both of which we all know are hot on the political agenda as the government strives to combat our growing obesity problem.
However, there is a big BUT on the way. Just as stopping TV junk food advertisers from targeting kids won’t put them off Happy Meals, nor will a free financial advice service encourage people to start a pension or stop frittering money away on credit cards or loans.
It’s all very well offering advice to people, but you can’t make them take it. And while I wouldn’t go as far as saying the advisers involved in this service will spend their days twiddling their thumbs I’m not convinced it will do the job the government intended.
The service would certainly attract lots of people who are struggling with debts – and with some Citizen’s Advice bureaux having waiting lists of around 12 weeks this has to be a good thing. However, unless they can find a way to really engage with the public I doubt they’ll have people coming in for information before they start borrowing, which let’s face it, is where the education is most needed.
And the chances are that those people who would use the service to find out about subjects like saving and pensions, for example, are those that would have sought out this information anyway.
I wouldn’t discourage any plan that seeks to help teach people about money. However I can’t help thinking that if this education is as important as the government is now encouraging us to believe, it should be taught in schools. Maybe then young adults would feel engaged with their finances and more likely to seek advice about the best way to plan their financial futures, rather than burying their heads in the sand.