Citizens Advice welcomes report showing need for financial education
26th January 2005
A new report that looks at the credit options available to people on low incomes and the information they use to make decisions on borrowing has been welcomed by Citizens Advice.
Would you credit it?, written by Paul Jones of John Moores Liverpool University and supported by Citizens Advice, is published today. The report was commissioned by the Co-operative Bank.
It calls on the government to work with the financial services industry to develop financial education for people on low incomes, saying that financial training at key life stages such as leaving school or returning to work after a long break could prevent people on low incomes becoming trapped in expensive forms of borrowing.
Researchers talked to clients and money advisers at Citizens Advice Bureaux, which last year dealt with 1.1 million new debt cases.
Citizens Advice Director of Policy Teresa Perchard, who will be speaking at the launch of the report today, said:
"This is an important piece of research on how people learn about money and make financial decisions when they have limited options.
"Citizens Advice Bureaux already have a key role in helping people on low incomes gain skills and confidence in managing their money. Many bureaux have developed their own financial education initiatives, and at least 65 run projects that help people, especially those at key stages in their lives, learn how to get and keep a grip on their money matters.
"This report shows just how important it is that we all work together to improve people's understanding of credit, as well as improving the information they have about it and the choices they have available.
"We want to see more affordable credit options developed and more transparency from lenders about the real cost of borrowing. Reform of the consumer credit laws and the new financial inclusion fund are essential steps in trying to make sure that people on low incomes can avoid being ensnared by extortionate credit deals and unmanageable debt. We also need to see reform of the social fund so that it becomes a more progressive and supportive option rather than a stigmatising and inflexible last resort which too often rejects applications for grants and loans from people in the most desperate need, leaving them to borrow at very high rates elsewhere."
Last updated: February 23, 2007