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Financial Capability Awareness Week
This week marks Financial Capability Week, set up and run by the Money Advice Service, developed to raise awareness of financial capability, what it means and the organisations you can turn to if you are in need of help regarding money.
Financial capability is the ability to be able to manage your money well on a day to day basis and through big and potentially life changing events like redundancy and divorce. Research from the Money Advice Service, for their Financial Capability Strategy, found that there is a big challenge ahead for organisations that aim to tackle and help those with low financial management skills.
There is plenty of work to be done in order to deal with the findings of the research into financial capability for adults, teenagers and pensioners. Many areas of financial management were covered and need improvement including:
- Retirement – 12 million people aren’t saving enough.
- Life cover – only half of people with a family have any kind of life cover.
- Savings – 21 million people don’t have modest savings of £500 to deal with emergency costs and only around half of the population save every month or most months.
- Budgeting – 19 million struggle with creating a budget that works for them and around 40% of adults do not have complete control over their finances such as being able to keep up with their bills.
- Debt – around 8 million adults are currently suffering with debt problems but only one in six are seeking help.
- Attitude – 30% of people do not openly discuss their household finances and many people are only motivated to save money if it is for a specific goal such as paying for a holiday or buying a new car.
When it comes to financial education for teenagers, the Money Advice Service said that last minute, financial education needs to be provided as 16 to 18 year olds are currently ill-prepared for financial responsibility.
Debt problems, learning how to budget and trying to saving for retirement are issues that affect many adults throughout their lives. One way to prevent these issues, especially debt, affecting further generations is to give them the tools to help themselves through good financial education and teaching them the basics.
Some of the things they need to know include: how to budget for bills, household expenses etc., how to understand their payslip, tax code and the amount of tax they should be paying, how to understand their credit rating and being aware that failing to pay bills can have a negative effect on their credit for years to come.
From financial education to an understanding of financial capability and an awareness of the organisations available to help those struggling with debt and financial management, Financial Capability Awareness Week is a good first step on the road to making big changes in the way the public deals with and thinks about money and their finances.
Here at Personal Debt Solutions, we strongly support any initiative that will help people deal with their debt struggles and put them on the road to financial freedom. We aim to advise and provide solutions to many people struggling financially through our own services and by working closely with charities such as Stepchange.
To find out more about Financial Capability Awareness Week, visit the website and join the conversation online by using the hashtag #FinCapWeek and tagging @FinCapStrategy.