In a bid to develop financial knowledge among Britishers, a new financial education agency is going to be established to provide the consumers financial advice. The agency would advice the consumers to comprehend mortgage deals and at the same time elucidate compound interest rates which would enable them to take sound financial decisions. As of now, financial education is under the control of the Financial Services Authority(FSA) but a new Consumer Education Agency is likely to take up the responsibility in the near future. At the same time, it has also been mentioned that the new agency would be financially backed by the banking sector under the Financial Services Bill. As a consequence, this would result in an enhancement in the amount that the banks already pay to the FSA to fund its work.
The new venture comes amidst concerns that whether the consumers can actually comprehend the various intrinsic details of the loans or the other different kinds of banking products that the banking institutions offer. Lately, various financial awareness charities have raised serious doubts about how much of the information that is provided to the consumers while dealing with banks are actually understood by them. Moreover, Learning and Skills Council recently conducted a survey in which it was revealed that 9 out of 10 persons failed miserably when asked to do preliminary financial calculations. These revealing data highlight the fact that the new proposed financial education agency is extremely pertinent in the present scenario and would go a long way in harnessing the financial skills of the consumers.
At the same time, it has also been implied that the proposed agency would be focusing mainly on adults whereas various schools would be giving emphasis to financial education at the preliminary level for children. Moreover, it was also mentioned by government officials earlier that in secondary schools personal finance would be a part of the Personal, Social and Health Education programmes.
However, the new initiative did not receive much support from the banking industry as the British Bankers’ Association has emphasized that banks are already doing their bit by providing monetary incentives as well as capability schemes for financial education. At the same time, certain postulates of the bill would also restrict bankers from receiving bonuses if it is considered that the bonus payment is likely to give an impetus to investments and deals which could contribute to increasing instability in the financial system.
Prime Minister Gordon Brown has expressed in his website that the new initiative is the one of the major steps that are being undertaken to ensure that the banking crisis that the nation has faced in the last couple of years can be countered in the proper fashion without putting any burden to the taxpayers. It was also implied that the new venture would contribute immensely in bringing about a new policing in the financial sector so that the common people do not have to pay the price in case of any failure of the financial institutions. At the same time, the proposed bill would make it easier for the consumers to take action against the financial institutions in case of any discrepancies.
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