Consumers should follow “five a day” plan for finances
The Government should implement a widespread campaign to raise awareness of financial wellbeing, similar to those it has released for healthy eating and drink driving, according to JP Morgan Asset Management.
A survey carried out by the asset manager found that nearly 60% of respondents did not know how much capital would need to be saved in order to generate a pension income of £25,000, forming part of JP Morgan’s incentive to propose a “Financial five a day” plan.
The plan proposes to help consumers understand what their financial-planning priorities should be and in what stages to make the most of their money. The first priority is to arrange life insurance or income protection, followed by building a cash fund, paying off expensive debt and opening an ISA and pension. The fifth stage is for people to review their position as and when needed.
Jasper Berens, head of UK retail sales at JP Morgan, said: “It is inconsistent, in our view, that there are extensive government guidelines on a broad range of aspects of living including diet, exercise, smoking and drinking but absolutely none on financial wellbeing – even though financial security (or the lack of it) can have a knock-on impact on every other aspect of an individual’s life.
“Without laying down some basic principles, it may not be possible to turn around the state of financial planning in this country. Now more than ever, in the throes of the credit crunch, it is essential for the government to help provide simple and effective financial planning guidance accessible to all UK individuals.”