Consumer Education

A NIACE response to Office of Fair Trading's Consultation on Consumer Education

NIACE (The National Institute of Adult Continuing Education - England and Wales) is a non-governmental organisation working for more and different adult learners. We welcome the opportunity to comment on the Office of Fair Trading plans for Consumer Education. This is an important area of work which has an impact on the lives of many people. The consultation asks for comment against a series of questions and we have followed this format in our response.

1. We welcome your views on the strategic aim and objective.

Strategic Aim

“Equip consumers with the confidence, skills and knowledge to enable them to make the best choices and resolve problems when things go wrong: to enable them to function effectively and responsibly in the modern market place.”

The vision of empowered consumers with the skills and knowledge to make informed choices is one that is easy to support. In order to achieve this outcome requires a considerable effort not least in the area of financial education. Currently within adult education there are relatively few opportunities to undertake consumer or financial education. There is wide spread acceptance that many millions of adults across Great Britain have limited understanding of financial matters.

While we support the overall strategic aim, we consider that “the modern market place” is too limited a term for the main aim. People need help in relation to a wide variety of decisions and choices, in relation to goods and services, offered by a wide range of providers, both private and public (e.g. local authorities, health and education providers). We would propose adding “living in contemporary society and their local community”.

A report commissioned by the National Westminster Bank in 1996 concluded that education, income, class and ethnicity all had an impact on the levels of financial skills and knowledge. The most disadvantaged people often have the greatest basic skills needs and therefore are the least well equipped to deal with financial matters. They face significant barriers to become well informed citizens able to function effectively in contemporary society.

However, the need for consumer education is not limited to people with basic skills needs but includes a wide spectrum of society. Many adults find financial decisions difficult to make and lack understanding about the options open to them. Citizens’ Advice Bureaux report that enquiries for financial advice are mostly from people in the 22 - 49 age range. They offer a network of 700 main bureaux and 1759 outreach venues offering a free general advice service. The CABs concentrate on debt and benefit advice but also cover more general matters. This service is extremely valuable but essentially it is about dealing with problems.

Some provision is available to adults to help them develop their understanding of finance, such as employers providing pre-retirement courses that cover financial planning. Marks & Spencer run an “Introduction to Financial Planning” course for their staff. Many newspapers have personal finance sections and Radio 4 broadcasts a programme called “Money Box”. Trades Unions, central and local government departments and agencies, consumer bodies, charities (e.g. Consumer Credit Counselling Service), credit unions, Independent Financial Advisers and many financial institutions provide information. There is a great deal of general financial information available but it is known that people are not motivated to read it and often find it difficult to understand when they do.

The emphasis of much of this provision is on short-term problem solving rather than helping people to gain the skills and knowledge to help themselves in the future. There is little Consumer or Financial Education provision available. The new work developing in the schools’ curriculum will not impact on the adult population for a very long time. NIACE would strongly recommend that it is essential to provide adult consumer and financial education in order for people to become skilled and knowledgeable to make informed choices. We welcome the view that it needs more than information to support consumers, but that it requires a strategic educational approach. Also, NIACE sees a great need for consumer and financial education in the context of overcoming social and financial exclusion.

It is fairly difficult to identify distinct Consumer and Financial Education since it is often integrated with other provision such as numeracy or information technology. It is quite rare to meet a tutor who specialises in consumer and financial education. Over the past two years NIACE has been developing online resources to encourage providers to develop financial education provision and has identified a considerable interest in developing provision but relatively few examples of existing programmes. NIACE has identified several factors limiting the development of provision:

What is required is a whole financial education strategy to support adults developing both the skills and the underpinning concepts. We believe these conclusions apply equally to consumer education.

The objective of ensuring that “consumers are equipped with an appropriate range of generic, transferable skills” is an admirable one. A tool-kit of appropriate learning resources which could be used in a variety of settings by a wide range of teachers and trainers would be very useful, especially for informal learning.

However, many adults, unless they are themselves teachers or trainers are not interested in the generality of consumer education. They are interested in a particular decision or consumer choice at a particular time (e.g. buying a car, choosing a pension or making a complaint). This means that consumer education is likely to be just-in-time learning or embedded into other areas (e.g. ICT, literacy and numeracy).

2. Do you think membership of the Alliance would help further your own consumer education work?

We would be interested in becoming a member of the Alliance. We think that a co-ordinated and strategic approach to Consumer Education and Financial Education would be highly beneficial.

3. Would you be interested in being a member of the Alliance or Planning Group?

NIACE would be keen to become a member of the Alliance and Planning Groups. However, the degree of our involvement will vary according to the nature of the priorities.

4. We would value your views on how the Alliance might function. For example:

We would suggest the initial step would be a seminar/conference so that members to explain/share their individual objectives and plans. This would allow the different plans of partners to be mapped. The gaps and duplications could be readily identified and taken into account during the planning process.

5. Do you think the Alliance, Planning Group and Working Groups are the best way to implement the strategy? Can you think of a more appropriate way forward?

Partnerships are a powerful way of working and often achieve excellent results. However, in order for a partnership to be effective the right environment has to be created. This consists of:

between all partners.

The approach will fail unless a substantial effort is made to create this environment.

6. Do you think the roles proposed for each of the three groups are appropriate?

The roles are generally appropriate but bureaucracy needs to be minimised.

7. Please comment on how the work of each of the proposed three groups should be promoted. What do you think is the right balance between activity and publicity?

Although publicity is important it is no substitute for action. It is vital that the work is activity based within a sound strategy. These activities must be based around support and resources for practitioners and around direct information and education of consumers.

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