The Money and Pensions Service (MaPS) announced that it is setting out a 10-year plan to improve millions of lives.
The government agency said that 11.5 million people in the UK have less than £100 in savings to fall back on, while nine million often use credit cards and payday loans to meet essential weekly food and energy bills, 22 million people don’t know enough to plan for retirement and 5.3 million children aren’t getting a ‘meaningful education.’
The MaPS believes something must be done to help people’s financial well-being.
Caroline Siarkiewicz, chief executive of MaPs says: “Financial well-being underpins personal health and happiness but it doesn’t happen by chance. We’re launching a strategy for entire lifetimes, aiming to expand financial education for children while ensuring everyone is equipped to plan for and enjoy their retirement. Key initiatives include increasing the availability of affordable credit, more payroll savings products and an expansion of free debt advice for when people are in crisis.”
In its 10-year strategy (2020-30) it identifies five key areas under discussion (see picture attached):
- Financial Foundations
- Nation of Savers
- Credit Counts
- Better Debt Advice
- Future Focus
MaPS believes that all these factors affect peoples’ well-being and mental health.
Chris Budd author of ‘The Financial Wellbeing Book’ and founder of the Initiative for Financial Wellbeing said in a recent interview in Professional Adviser: “One of the five elements of financial wellbeing is having ‘a clear path to identifiable objectives. This is actually a pretty decent description for the process of financial planning. Work out what you want from life, then spend your money on that.
“The road out of debt and towards healthy long-term savings is a marathon not a sprint. The MaPS ten-year vision may seem like a long timeframe, but is realistic given people’s limited means and the extent of debt dependence in the UK.”
Budd adds: “In order to achieve this, however, we first of all need to know what we want from life – what makes us happy. This comes in two parts. Firstly, what does research on happiness tell us? What are the theories and principles that underpin wellbeing?
“The one golden principle underlying financial wellbeing, however, is ‘Know Thyself’. Understanding what will make you happy is the second part to the process. And this brings us to the other major contributor to wellbeing that often gets overlooked: purpose.”
Commenting on the launch of the MaPS ten-year UK Strategy for financial wellbeing, Becky O’Connor, personal finance specialist at Royal London, said: “The road out of debt and towards healthy long-term savings is a marathon not a sprint. The MaPS ten-year vision may seem like a long timeframe, but is realistic given people’s limited means and the extent of debt dependence in the UK. Alongside this national initiative, we can all do a bit more individually to apply the principles of strong budgeting, goal setting and good habits to our finances.”