Rethinking Financial Capability. Lessons from economic psychology and behavioural finance
Article
Our society has moved from a 'thrift ethic', where people limited their consumption of goods to what they could afford at the time, to a 'consumption ethic'. But evidence shows that the public's ability to manage personal finances has not kept pace. This report argues that to encourage greater financial 'capability' government policy should prioritise efforts to improve people's ability to plan ahead, as this has most serious repercussions for individuals, business, the economy and the financial services industry.
This report also sets out a case for seeing financial capability as more of a central social welfare issue. It suggests moving responsibility for the National Strategy from the FSA to the government, through the Department for Work and Pensions (DWP) and the Department for Education and Skills (DfES). This research is sponsored by Norwich Union.
Related items
En route to renewal: Delivering better, greener buses
Good buses drive a strong economy, healthy environment and thriving society.On track to prosperity: Great Northern Rail
It’s time the North saw real change for better transport, delivering prosperity and better lives: a long-term plan for Great Northern RailIt's the cost of living, stupid: Why progressives lose and win
UK households are impatient for change. Trust in our political system is low and that’s reflected in scepticism across the board that government can make things better.