Too many people are financially illiterate and the nanny state is to blame, Adrian Pickersgill, a director of Stratford-upon-Avon based Self Financial Planners, claimed today.

And, responding to a speech at the Labour party conference by Chris Pond, director of financial capability at the Financial Services Authority, he claimed people were not prepared to make the sacrifices needed to build up a decent nest egg for their retirement.

Mr Pond said increased financial capability would help generate trust in the industry.

"The level of trust in financial services has not changed, it was not very high before [the credit crisis] and it is not very high now."

However, the Government's forthcoming White Paper would help to address some of the issues.

"Consumer education and information is a very important step forward,” said Mr Pond. “Terminology is also important.
We need to make sure that people have the education to make sense of the information."

Mr Pickersgill said it was easy to blame the Government, albeit the educational system was at the root of finance failure.

He went on: “The sad fact is most people are not very financially literate.

“The reality is that they will not take financial responsibility, abdicating it to the financial institutions. Then, when things go wrong, they blame everyone else except themselves. If you abdicate responsibly for your financial arrangements then you have no one to blame but yourself.

“Except, of course, we now have the FSA and Ombudsman system, who generally dictate how advice must be given and as a result everyone ends up with the same advice. Oh, and there is a 'free' compensation scheme for everyone.

“Advisers and insurance companies provide mountains of information because they have to protect their backs, like with the credit crunch, from clients who after convenient memory lapses suddenly say 'I never take risk so why has my fund fallen?'.

“Society and the drive towards a nanny state are to blame. People do not want to hear how much they need to save to fund their retirement because they would have to go without cable TV, booze, that new car, holidays and having a good time.

“Risk is natural and cannot be removed. What is needed is better education. That is why the rich get richer and the poor get poorer.”

Mr Pickersgill urged that financial capability be ranked on a par with literacy and numeracy for children.