A new independent report, which contains 13 recommendations to address the urgent financial wellbeing implications of the Covid-19 pandemic, has been released today by the Challenge Chairs who advise the Money and Pensions Service (MaPS) on the UK Strategy for Financial Wellbeing.
These recommendations, which include immediate actions – such as 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 – are set out in a report, Building the UK’s financial wellbeing in the light of Covid-19.
The report has been independently written by the UK Strategy for Financial Wellbeing Challenge Chairs. This group of sector leaders started 2020 developing operational plans for the decade-long UK Strategy for Financial Wellbeing, however when the crisis began to take hold they adapted the way they work to reflect the new needs of people affected by the crisis.
A fundamental aspect to the UK Strategy for Financial Wellbeing is organisations working together for a common goal to better the financial futures of people in the UK. In this report, the Chairs have made recommendations for MaPS, governments, businesses, the financial services and third sectors to work together to take action in order to help lessen the continuing impact of the crisis. They also highlight the impact of Covid-19 on some Black, Asian and Minority Ethnic (BAME) communities, whose financial wellbeing has been particularly affected.
The recommendations 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 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.
Ben Page, Chief Executive, Ipsos MORI (Challenge Group: Credit Counts — Use of Credit) said: “All the data we are seeing shows that what started as a physical health crisis is rapidly expanding to become a huge problem for people’s mental and financial wellbeing.
“These recommendations are challenging and wide-reaching, but they ask important questions of influential organisations to make a difference to people’s lives by December 2021, and much earlier where possible.”
Jackie Leiper Managing Director, Workplace Savings and Distribution, Lloyds Banking Group (Challenge Group: Gender and Financial Wellbeing), commented: “Even before Covid-19 changed all of our lives and sent shockwaves through the economy, many people in the UK faced tough challenges to their financial wellbeing. The pandemic has magnified these challenges and disproportionately affected many of those who were already disadvantaged – such as the self-employed, part-time workers, young people, women and ethnic minorities.
“It’s vital that that steps are taken to address existing inequalities so that everyone has the best chance to improve their financial resilience, and that the services and products provided are accessible and relevant to those who need them most.”
The Challenge Group Chairs have focused this report on 13 recommendations that are deliverable by the end of 2021 and will achieve significant improvements in the financial wellbeing of people made acutely vulnerable due to Covid-19.
These recommendations have been developed alongside a wider programme of work contributing to the longer-term delivery plans which will set out how the UK Strategy for Financial Wellbeing will be delivered by the end of 2030. These delivery plans will be published in March 2021 and will have specific commitments for each nation of the UK.
The report also highlights some of the great work being undertaken by organisations around the UK right now, drawing upon a wealth of contributions from across the 11 Challenge Groups including those explicitly tasked with representing the Northern Irish, Scottish and Welsh perspectives.
Emma Douglas, Head of DC at Legal & General Investment Management and Chair of the Pensions and Lifetime Savings Association’s Policy Board (Challenge Group: Future Focus — Long-term savings) said: “Challenges such as those we are all experiencing this year, have made us take stock, whether that is around how we spend our time, who is important to us, where and how we work and what our future plans are.
“The ongoing uncertainty makes longer-term financial planning challenging. We know this has implications for people’s outlook and their wellbeing. We have responsibilities to support them as much as we can; part of this is about how we better support people with making important financial decisions based on making the most of the money they have, and to educate, inform and support them over the course of their financial lives.”
Paul Farmer CBE, CEO, Mind UK (Challenge Group: Mental Health and Financial Wellbeing), added: “The coronavirus pandemic is not just a physical health crisis, it’s a mental health one too, and financial stresses can be a key factor in either triggering a mental health problem or making an existing one worse.
“It’s important that people have the knowledge and skills to empower themselves to make good financial decisions. But it’s also crucial that safeguards are put in place to protect the most vulnerable, including much-needed reform to the benefits system.”
As the body leading the financial wellbeing movement, MaPS has a role to play in all the recommendations made by the Challenge Chairs. However, just over half of the recommendations explicitly call for MaPS to undertake action. MaPS will be responding to these requests by the end of the year.