These views build upon the proposals developed in March 2015 by TISA’s Savings and Investments Policy project, as part of a detailed set of recommendations to re-establish a savings culture in the UK and incentivise long-term saving.
Research reveals that 12 million people are not saving enough for retirement, with two thirds of people not knowing how much they need to save for retirement. It warns that this clearly demonstrates the low levels of financial security and wellbeing as a result of borrowing rather than saving; failing to budget or plan financial matters and not putting enough aside to create adequate retirement pots.
TISA has outlined its response to HMT and FCA’s consultation on Financial Advice, making eight key recommendations on ways to re-establish a savings culture and to address the mass-market need for support in managing their financial affairs. One of their key points was the need to clarify the difference between guidance and advice, noting that it was necessary to 'provide clear definitions of guidance and advice, through implementing a form of restricted, regulated support for consumers, focusing on specific savings needs, allowing consumers to make informed saving choices'.
TISA also recommends a defined kitemarked guidance framework that can be adopted by financial services, government backed organisations and the third sector so that the consumer has a consistent experience, regardless of where they seek guidance, and says it is important to acknowledge housing as a savings option being adopted by consumers – so that consumers are encouraged to consider the practical aspects of using their home as a means of income in retirement.
David Dalton-Brown, Director General of TISA said:
“Over the past 20 years, the UK has experienced considerable changes in both the amount and the way that consumers save. Encouraging people to save more goes beyond just new regulation. It is about creating new cultural norms and enshrining a shift in responsibility for personal financial security from the state to individuals.
“Building on the original TSIP proposals in March 2015 regarding increasing public access to generic guidance, we are looking at financial advice from the perspective of how to develop a solution that meets the needs of the mass market, who typically have limited savings and for whom a guidance solution maybe a good alternative to advice.
“Our recommendations aim to help consumers enhance their financial resilience and security, through a kitemarked guidance framework. We hope that our views are strongly welcomed by HMT and the FCA and look forward to working with the financial services industry to provide support for consumers to seek better guidance and advice, in order to enhance their financial welling, and help to re-establish a savings culture in the UK.”
