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The head of Britain’s financial watchdog has called for better financial education in schools, warning UK economic growth faces an “uphill battle” without it.
Nikhil Rathi, chief executive of the Financial Conduct Authority, said the UK needs to tackle the “root causes of financial exclusion”, citing a recent report by the Education Select Committee of MPs.
He said: “Effective financial education needs to begin early. Potentially even at primary level, as the select committee called for, and should now be considered in the Government’s curriculum review.”
Mr Rathi made the remarks in a speech on Thursday at an event by debt charity Stepchange, attended by regulators such as Ofgem, local government officials and consumer finance companies.
He said companies, along with the FCA and other public sector bodies, also need to help improve financial inclusion across the working age population, amid a rise in digital money-related products.
He said improving digital financial inclusion across the entire population “can help mitigate barriers to, and possibly catalyse” economic growth.
He called for a “fundamental change of mindset” at the regulator, the Government and at financial services companies to improve people’s access to things like digital loans and savings products.
“It’s about access to what you need to live your life,” he added.
Mr Rathi pointed to recent trials of auto-enrolled workplace savings schemes, where, similar to pensions, employers deduct the amount workers want to save directly from their payroll unless the employee opts out.
The National Employment Savings Trust (Nest), which has run the trials, said the schemes were popular with 93% of those surveyed during the trials.
He said: “With an estimated one in three working age people not having access to £1,000 of cash savings to help with unexpected life events, this could be a game changer.”
Moreover, Mr Rathi continued, the financial advice and guidance market in the UK “does not work well”.
He added: “Working with Government, it is our hope to reform the system so consumers get the help they want, when they need it, and at an affordable cost.
“This could improve support for making pension decisions or choices with long-term savings and investments.”
At the same event, Financial Ombudsman Service chief executive Abby Thomas urged businesses to step up support for people in debt.
In the first three months of this financial year, complaints rose by 70% versus 2023, she said, with 18,000 credit card cases, of which 15,000 related to irresponsible or unaffordable lending.
Ms Thomas said the volume of complaints is “concerning” and that lenders must treat customers “fairly and with empathy”.
She added: “There are so many well-established rules and guidelines – including most recently in the consumer duty – that are designed specifically to help financial businesses find ways of supporting their customers when the need arises.
“But despite this, we’re still seeing cases where customer experience has fallen far short of what it should have been.”