Public awareness on options for
saving for Christmas
91. The Pomeroy review noted that, because of Farepak's
collapse, former users of hamper schemes were in search of ways
of saving in advance of Christmas in order to avoid going into
debt. The review recommended that, "in view of the uncertainty
that has been caused over Christmas savings schemes, and the risk
that this may prevent people who would otherwise have saved for
Christmas from doing so, the Government should consider mounting
a specific campaign to make consumers aware of their options".
Mr Pomeroy told us that he found that some people who had formerly
saved with Farepak were disoriented and insufficiently aware of
other options. He envisaged a campaign to deal with that problem:
"I am talking now about Christmas 2007 and not beyond that".
92. The Government responded to the review's recommendation
in March 2007 by making £1 million available to the OFT "to
conduct a consumer awareness campaign in the coming months on
Christmas saving schemes and mainstream alternatives".
When we took evidence at the start of May, Mr Pomeroy and other
witnesses stressed that they viewed the launch of the awareness
campaign as a matter of urgency, not least because many people
started to save for Christmas in February.
Ms Whyley cautioned that "we may well have already missed
the boat this year".
The OFT agreed to conduct a consumer education campaign, which
was launched on 1 June 2007 under the title of "Save Christmas".
The OFT suggested to us that they had worked very quickly to put
together a public awareness campaign in little more than two months
from the initial proposal.
The OFT had consulted credit unions and some other providers of
Christmas-related products prior to the launch, as well as consumer
groups such as Citizens Advice, but implied that consultation
with the Park Group was contingent upon final agreement on trust
93. The OFT stated that the aim of the "Save
Christmas" campaign was "to encourage those wishing
to save for Christmas to look at the features of hamper schemes
and alternative options and to empower them to make decisions
that are better for their particular circumstances".
We were told that the campaign would cover most options for Christmas
saving and attempt to describe the risks in each case.
The short leaflet for consumers which the OFT has published covers
almost all of the product options which we referred to earlier,
and, in relation to each, provides answers to questions such as
"Do I get interest on my money?", "Will they collect
the money from my home?" and "Is there any protection?".
94. This basic consumer information is to be supported
by other measures. The campaign began with a public relations
launch, which the OFT considered had gone well in terms of attracting
widespread media coverage.
The OFT told us that the next phase of the campaign would involve
consumer education activities delivered locally by organisations
that had face-to-face contact with the campaign's intended audience,
starting in Scotland and moving to other areas during the second
half of 2007.
The OFT argued that the campaign's concentration on affected communities
explained why the campaign was not nationally prominent.
The Minister supported the use of "existing local, trusted
networks", which he thought would be more effective at reaching
the intended audience than "a standard, off-the-shelf, national
95. The OFT initially indicated to us that the campaign
would end "in late November/early December" with a national
advertising campaign with associated public relations designed
to "reiterate and reinforce the messages at a time when consumers
are deciding how they will save for Christmas 2008".
Of the total budget of £1 million, £400,000 will be
devoted to national advertising.
There was some inconsistency in the OFT's oral evidence about
the precise timing of the advertising campaign. Witnesses from
the OFT at times referred to "December this year" and
"the end of the year" as the best time for advertising
about decisions on saving options for Christmas 2008.
However, Ms Sue Cook, the OFT's Acting Director of Communications,
also told us that the OFT would be running the national advertising
campaign "in December and January because our research tells
us that people start to decide how they are going to save for
Christmas in December and start to actually start the schemes
Subsequent written evidence from the OFT indicated that the campaign
on savings options for 2008 would take place "at the end
of 2007 and the beginning of 2008".
96. The original purpose envisaged for a consumer
awareness campaign by the Pomeroy was to respond to the needs
and concerns of consumers affected by the collapse of Farepak
relating to Christmas 2007. It is not immediately evident that
the campaign begun by the Office of Fair Trading in June 2007
will be effective in responding to this intention. We are concerned
by the inconsistencies in the evidence from the Office of Fair
Trading about the best time for a national advertising campaign
directed towards saving decisions for Christmas 2008. We recommend
that, before committing to expenditure for a national advertising
campaign, the Treasury review the conduct of the campaign by the
Office of Fair Trading and ensure that the Treasury is satisfied
that the appropriate timing has been determined to inform consumers
in making saving decisions for Christmas 2008. We expect the Treasury
to report on the outcome of that review in its response to this
97. In addition to making a specific recommendation
about a campaign about Christmas saving, the Pomeroy review also
drew attention to the need for Government initiatives relating
to financial capability and financial inclusion to take full account
of "all products that are used for the purpose of saving,
even if in legal terms they are not formally saving products".
In particular, that review recommended that "informal saving
schemes should be given greater emphasis within
review of generic financial advice",
to which we referred earlier.
In evidence to us, Mr Pomeroy argued that those giving generic
financial advice needed to be aware of informal financial products
and to give them appropriate emphasis.
In response to the review, the Government confirmed that the Thoresen
review would "consider how to provide better generic advice
on informal saving".
We welcome the inclusion of informal saving within the range
of matters to be considered by the Thoresen review of generic
financial advice. We look forward to reviewing the proposals of
that review on how such advice can give due weight to informal
saving options, bearing in mind the risks to the consumer that
continue to be associated with some informal saving options.