New Government Scheme to offer financial advice

A new scheme has been proposed by the Government which could be available to the public as early as next year. The Generic Financial Advice idea is a service that would offer basic financial advice to people in the UK.

Early reports indicate that it would be a great and very cost-effective way of helping people understand their finances better and help them manage money more successfully, making them less likely to get into 'bad debt' situations.

Despite predicted running costs averaging £60 million annually, plus a further £30 million in advertising and marketing, the GFA still believe the financial costs would prove to be less than the benefits it would provide to people. Pilot schemes for this financial advice service would initially start in Staffordshire, London, S. Yorkshire and the North West of the country.

It has not been designed for those who are already in financial crisis, but is aimed at those financially vulnerable, as it would hopefully help people getting into serious financial difficulties. The advice service will help people work out and manage their budgets, make sensible plans for their retirement and understand the tax and benefit rules.

Experian, the Credit Report company, announced that their research had shown as many as 70% of UK residents would not understand the impact on their mortgage if interest rates rose by 0.5%. I think the advice centre is a great idea and hopefully will get much use and help many people take control of their finances before getting into trouble.

However I think I prefer the idea that Martin Lewis of Money Saving Expert fame has. He wants to go into schools and actually get practical personal finance being taught to teenagers. What a brilliant idea - teach them while they are at school, it will also set them up to be more prepared when they go to college and University so they are able to make better decisions from the start and not when they are already in debt from student and graduate loans that have been badly chosen.

It would make them more aware and more responsible, they would then be able to teach their financial knowledge to their kids and break the cycle that we seem to be caught in as a nation, spending and borrowing without a second thought. They also need to know that it often doesn't pay to be loyal to a bank or building society. They are big businesses after all out to make money - from you!