Last week, Keir Starmer made a decisive shift in focus—moving from a narrow “growth objective” to a broader and far more meaningful goal: raising living standards. For the public and holistic financial planners alike, this is a breath of fresh air and a move in the right direction. Why? Because the old focus on growth disproportionately benefited financial capital while leaving millions behind.
Financial Capital vs. Human Capital
Total wealth isn’t just about financial capital—the money invested, saved, or held in pensions. It’s also about human capital, the present value of our future earnings, talents, and potential. Unfortunately, the growth objective was interpreted by the FCA and City stakeholders as an opportunity to relax regulations and push financial products to the masses. This approach, aimed at plugging savings and pensions gaps, simply bolstered the City’s revenues, contributing to banker bonuses rather than raising the living standards of ordinary Brits.
While the financial services industry accounts for 10% of GDP, the reality is that trickle-down economics doesn’t work. The squeezed middle already struggles to make ends meet, and during a cost-of-living crisis, the last thing they need is to have their pockets emptied with empty promises of ‘more tomorrow’. Likewise, businesses can’t bear the brunt of increased pension contributions when they’re already grappling with higher national insurance costs and rising minimum wages.
A New Approach: Investing in Human Capital
If we truly want to improve lives and living standards, we need to focus on human capital development. This means creating opportunities for people to improve their livelihoods through lifelong learning, entrepreneurial pursuits, and economic activities that align with their values, skills, and passions.
Let’s be clear: this isn’t just about raising wages or handing out pay rises. It’s about a long-term, transformational investment in people.
- Inspiring young people and those on sickness benefits to access opportunities for meaningful work.
- Eliminating age discrimination in the workplace, ensuring no one’s skills and experience go to waste.
- Offering flexible, accessible, and lifelong learning to help people upskill, reskill, and realise their full potential.
This human-centred approach not only raises living standards but also indirectly strengthens spending and saving, fuelling real, sustainable growth for the economy.
A Call to Action for the FCA
The message to Nikhil Rathi, Chief Executive of the FCA, is clear: get with the programme. The FCA’s secondary “growth” agenda—as outlined at Mansion House—must be replaced with a “standard of living agenda”. This is a call to shift priorities:
- Move away from flogging financial products that do little for 92% of the population left underserved in the advice gap.
- Focus instead on raising living standards and fostering solutions that help people achieve financial security, prosperity, and peace of mind.
Holistic financial planners, who already take a people-first approach, are perfectly placed to lead this movement. By empowering individuals to align their economic activities with their values and passions, we create not only financial wellbeing but also social and emotional fulfilment.
A Brighter Future for All
Keir Starmer’s commitment to raising living standards signals a shift towards a fairer, more inclusive economy—one that works for everyone, not just the financial elite. By investing in human capital and empowering people with opportunities for growth, we can create a more balanced and prosperous society.
Holistic financial planners, let’s seize this moment to champion real change. Together, we can transform financial planning into a tool for raising living standards and improving lives—not just for today, but for generations to come.
Academy of Life Planning 