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Last Updated: Monday, 15 January 2007, 16:10 GMT
Financial advice service planned
A man writes a cheque
The government wants everyone to understand their financial options
The government wants to set up a national financial advice service to help people with basic money matters.

The Treasury has asked Otto Thoresen, the head of the financial services firm Aegon, to research and design it.

The announcement was made by Treasury Secretary Ed Balls at the start of the government's Child Trust Fund week.

The government hopes to publish a plan for such a service by the end of 2007. The scheme would seek to help people with the worst financial understanding.

Mr Balls said he wanted everyone including the poorest, to have "quick, easy and simple access" to good quality financial advice because many financial policies were complicated and surrounded by jargon.

"Sometimes people just want to discuss their financial options and not buy anything," he said.

"We believe there is a gap in the provision of this last type of advice - generic advice - and I have asked Otto Thoresen to research and design a national approach for filling this gap."

Financial capability

A new national advice service, giving general advice rather than selling specific polices, is part of the government's long term aim to improve what it calls the country's "financial capability".

Anna Pearson, of Help the Aged, said: "Too many adults are putting off the decision to ensure they make decent provision for older age because of the complexity involved in choosing the right pension.

"Help the Aged is concerned that there is also a serious lack of money management advice addressing the specific needs of older people, leaving many struggling with money matters."

The Associating of Independent Financial Advisors (AIFA) welcomed the announcement, but sounded a note of caution.

"We believe there is a major difference between generic information and generic advice: the two must not be confused," warned Chris Cummings, the AIFA's director general.

"Information, by its nature, is generic, but advice implies a personal understanding of someone's individual needs," he added.

"Consumers need to have the reassurance of which is being delivered if problems are not to arise in the years ahead."

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