The Money and Pensions Service has released a report today calling on the retail banking sector to put customers’ financial well-being at the centre of their corporate purpose.
It also wants banks ensure their products and services include features to help people improve their ability to manage their money well.
The report argues that while the sector has made progress with good-practice features built into current and savings accounts, there is room for improvement and greater take-up across the sector.
It is based on interviews with employees across 19 banks, building societies, financial technology firms and one credit union.
Currently, nine million people in the UK are struggling with problem debt, 11.5 million do not even have £100 in savings, and a further 24 million people do not feel confident making decisions about financial products and services.
MAPS also points out low financial capability is contributing to tens of millions of people in the UK lacking the resilience needed to deal with unexpected events such as job loss, while debt can affect a person’s mental health.
MAPS chair Hector Sants says: “Money is a fundamental part of life and is central to people’s health and wellbeing. A population that can manage their money and pensions well is essential, and the retail banking sector has a critical and central role to play in moving the dials for the UK population.
“It is time for the sector to take a much more proactive, holistic approach to financial wellbeing, shifting the balance from the cost of remediation to investment in prevention.
“We encourage the sector to work with us to develop and implement the changes needed to improve people’s financial capability, as well as rebuilt trust and confidence in financial services.”