The BBC reported one worker claiming that they had lost £200,000 by transferring out. The BBC also reported that some £1.1bn and some 2,600 transfers had been made. The Work and Pensions Select Committee, chaired by Frank Field MP, reported on the case. The Report noted that ‘dubious advisers exploited BSPS members for personal gain’ supported by ‘unregulated and parasitical introducers’ (para 50). The issues were the level of advice fees, high transfer fees and high on-going investment charges – not to mention the suitability of the advice to transfer out. The full Select Committee report can be read here.
Financial and business education is essential to a moral economy
These two quite different incidences made me think about basic financial and business education for all – i.e. beyond those taking Economics or Business Studies. None of my children report to me any input or teaching at school about budgeting, how pensions work, savings, managing debt, the tax system, basic information about business and the economy. They all were scathing about lessons in Citizenship. I am not competent to comment on the latter, but it seems to me we are missing a trick.
- A moral economy certainly requires good behaviour by companies and corporate participants in the economy. It also requires good judgement calls by individuals and at least some ability to assess what they see and are told.
- An economy which works for everyone needs some commitment to saving and proper management of personal debt as well as national debt and borrowing.
- In order to exercise that judgement and manage saving and debt business and financial education is essential.
- Wary as I am of centralised curricula and demands, I wonder whether there should not be some form of Certificate of Business and Financial Education taken by all before leaving full-time education.
- This would also be a significant opportunity for the local business community to support schools in a practical way building perhaps an effective partnership for the future.
An enterprise economy which rewards innovation and creativity is essential for the well-being of all, for the common good. It is unrealistic to think that we can abandon models of economic growth and wealth creation as the key provider of jobs, goods and services, a tax base and indeed the profits for further investment. However, for that economy to function as a moral economy we need to ensure, yes, appropriate regulation and law, but more particularly that all participants in that economy can take part, not with equal outcome, but with equal opportunity. This requires partnership, skills, and indeed a degree of economic freedom and liberty. Hence, education lies at the heart of this vision, equipping future participants, whether entrepreneurs, workers, consumers or citizens. The first step to a moral economy is educated participants.
This article originally appeared on the website of the Centre for Enterprise, Markets, and Ethics (CEME) and is reprinted with permission.