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Economist - Enlightenment Economics
Diane Coyle runs the consultancy Enlightenment Economics. She is a BBC Trustee and a member of the Migration Advisory Committee, and was for eight years a member of the Competition Commission (until September 2009). She is also visiting professor at the University of Manchester, a member of the advisory board of ING Direct UK and of the stakeholder advisory panel of EDF Energy.
Summary of essay
The first step on the path to financial security is to build up some savings. The financial crisis has made it clear that debt is a dangerous burden. The difficulties many families are experiencing now act as a painful reminder of the benefits of old-fashioned thrift. Without that cushion, people have no resilience in dealing with the normal ups and downs of life.
The financial services industry can help by reducing complexity and information overload, as well as by helping to improve regulation and investing in financial education. Simplification will also help as people only require key information to make a decision on which product is right for their circumstances.
Savers must take responsibility for personal financial security whilst the government should develop a financial literacy initiative, to ensure everyone from a young age has the basic skills to make informed financial decisions. Financial services companies must also rebuild trust with consumers by changing and simplifying products and services to make customers' long-term security the priority.