The Financial Services Authority has been accused of failing to spend enough on consumer education.

Ron Sandler, who has been appointed by the chancellor to investigate the savings industry, said the "appallingly low levels" of financial literacy among consumers means they often buy the wrong products.

Forum Response: General Insurance Standards Council

A spokeswoman for the General Insurance Standards Council told ePolitix.com: "GISC is a member of the PFEG Advisory group and is in touch with the Consumer Division of the FSA concerning the education of consumers of general insurance products.

"GISC believes that the education of schoolchildren, as consumers of tomorrow (and, increasingly, of today), is fundamental to building a competent consumer society, and agrees with Ron Sandler that more resources are needed.

"GISC has developed its own material to be used in schools within their personal finance awareness initiatives. This is being trialled for award of PFEG's Quality Mark and GISC expects it to be available for use in schools in the second half of 2003."

Forum Response: National Consumer Council

Gill Bull, acting chief executive at the National Consumer Council, said: "People certainly need help in making the right decisions about complex financial matters. Improving financial literacy and consumer skills are key.

"But the real issue is the need for clearer information, simpler products and affordable advice. All sections of the financial sector - the FSA, companies and advisers - together with consumer organisations must now play their part.

"The new citizenship strand of the national curriculum should also boost young people's understanding of financial issues."

Forum Response: Consumers' Association

Mick McAteer, senior policy adviser at the Consumers' Association, said: "At a time when consumers need advice even more to plan for basic needs such as making sure they have a decent standard of living in retirement, the result of the FSA's policies will be to reduce access to regulated advice on stakeholder products. Regulated advice didn't prevent pensions mis-selling or mortgage endowment mis-selling but at least consumers had access to redress.

"In effect the impact of the FSA's proposals for selling stakeholder products would be to restrict access to the Ombudsman scheme. It doesn't take a genius to imagine the incentives and temptation for insurance companies and banks to mis-sell stakeholder products.

"We of course strongly support the principle of financial education and think the FSA should devote more resources to it. However, given the legacy problems in the UK it should be recognised that any education initiatives will have a slow burning effect and take some time to pay dividends. Until then we see no substitute for unbiased, consumer focused financial advice. Frankly, it would be misguided to remove the protection provided by regulated advice until these educational initiatives have time to work.

"There are record levels of debt in the economy with over six million families having difficulty with repayments. The only feasible way ofproviding access to advice on pensions and debt (and to help deliver educational initiatives effectively) is to establish a National Financial Advice Network to complement private sector capacity."