Speaking about research released today which found that one third of middle class families would need to borrow money to pay an unexpected bill of £500, Caroline Rookes, Chief Executive for the Money Advice Service said:
‘This research confirms the findings of the 2015 Financial Capability Survey and clearly shows that levels of financial capability among the UK remain stubbornly low. This problem is not exclusive to the middle classes – across the UK people from all walks of life are ill prepared for a financial shock and therefore are at risk of losing control of their finances. A “spend today rather than save for tomorrow” mentality means that millions of people lack the financial resilience needed to deal with unexpected expenditures and therefore run the risk of falling into uncontrollable debt. Not only that, the Financial Capability Survey showed that one in five adults cannot read a bank statement, one in three cannot calculate the impact of a 2% annual interest rate on £100 of savings and 19 million don’t have an approach to budgeting that they feel works.
‘Ensuring that people are able to manage their money well day today, can prepare for and manage life events and are equipped to deal with financial shocks are key aims of the Financial Capability Strategy for the UK. By evaluating existing schemes that aim to improve financial capability, finding out what works and encouraging organisations to use the most effective approaches, the Strategy aims to deliver the collective impact needed and to make people across the country more financially secure.’
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