New research shows that for young people to achieve positive retirement outcomes, they need education from earlier stages about finance and pensions. But as Talk Money Week begins, the Money and Pensions Service has proposed funding cuts to face-to-face debt advice. How important is it to keep money conversations going? 

Talk Money Week, a yearly campaign run by MaPS which runs from 8-12 November this year, aims to help people open up about their finances. Recent research by the Pensions Policy Institute found that in order to help young people’s engagement, conversations about finance need to happen earlier. 

More than 90% of respondents to PPI’s Young People and Pensions Survey said they think financial and retirement planning should be a mandatory subject in education. 

“Most young people recognise the importance of pension saving but need support to become more engaged and knowledgeable in order to make appropriate decisions about contribution rates that will enable them to achieve adequate retirement outcomes later in life,” said senior policy researcher at the PPI, Lauren Wilkinson.

Wilkinson acknowledged that the industry has made steps to work on education and guidance but said there is not currently much support for those at the beginning of their saving journey: “There is clearly more work to be done engaging and educating young people as early as possible, while also recognising the importance of pitching this at the right level to minimise the risk that increased engagement could lead to an increase in those making less optimal active choices.”

But, according to a new piece of research from MaPS released for Talk Money Week, a third of parents and carers don’t talk to their children openly about money, missing out on the opportunity to help with their children’s vital early understanding of money.

The survey, which included 3,000 parents, found less than half talk openly with their kids about money. “We understand that for many parents, talking about money can sometimes feel like a daunting task amongst all the other things they have to think about every day. But taking some time now to talk money with children can have benefits that last a lifetime,” said MaPS CEO Caroline Siarkiewicz.

Despite this research, it has been proposed to halve face-to-face debt advice funding in some areas. According to union Unite, many areas will see reduced access to debt advisers and some services will close altogether. In some cases, those in the most need of debt advice can only access face-to-face services. 

MaPS is an arm’s-length body and is currently recommissioning the services for debt advice, awarding three-year contracts to the successful tenders. Evaluation has been underway, but it has been said that new contracts will see more money spent on help given over the phone or online.

Debt advice specialists are concerned that moving to online consultations will mean people with complex debt problems will be left without the detailed advice and support they need to address spiralling debt. Unite warned this could result in redundancies for debt advice specialists too.

“MaPS’s plans to shift from face-to-face advice towards call centres and webchat may work well for some people, but the most vulnerable people, and those with the most complex cases, can often only deal with their problems in person,” said Unite national officer, Siobhan Endean.

Unite also says that MaPS’s plans are based on research conducted before the pandemic and do not take into account the huge changes since March 2020. Nearly three-quarters of debt advisers say their cases are more complex now than before the pandemic. 

“We are saying to MaPS and the government that they must think again. The planned changes are based on out-of-date evidence which is not fit for these times,” said Endean.

In a statement released last month, MaPS assured that it worked with potential providers on how they would provide a seamless experience for customers, including vulnerable people with complex needs. 

"We are working with debt advisers on how they will deliver what customers need, in the way that customers need it, including continuing to offer face-to-face services. We also want them to consider how other service channels – such as virtual appointments – should also form part of the service they offer. In addition, we asked providers to set out how they will protect the wellbeing of advisers, and invest in their training and career progression," MaPS said.

The union is calling on MaPS to halt the process while it commissions independent evidence and engages with frontline staff to find a way forward.