fear of finance

Are Londoners the worst in Britain at managing their own money? This, apparently, is the conclusion of a report carried out on behalf of IFA Promotion, a group which promotes independent financial advice.

The research, carried out by Mintel, a well-respected organisation, shows Londoners have lost track of more than pounds 2,000 each on average. By contrast, their West Midlands counterparts have lost sight of just pounds 1,400 apiece. People living in the South-east of England do not know the whereabouts of pounds 1,900 each.

The lost money referred to, more than pounds 77bn for the whole of the UK, is an estimate of all the forgotten and unclaimed cash sloshing around in bank, building and friendly society accounts, National Savings, stocks and shares.

Of course, reports like this have an ulterior motive. IFA Promotion regularly comes up with similar wheezes. The aim of the exercise is to direct us to one of its advisers, who will helpfully guide us on how to invest this money - or any money we may have, for that matter. Even so, there is something here to make us sit up and listen.

The report points out that, while some of the money would be hard to access, about pounds 14bn of it simply lies in dormant or obsolete building society accounts. Even if they think they know where their money is, and many have forgotten, savers are receiving pitiful rates of interest on their deposits.

Some pounds 1.6bn languishes on National Savings extension rates, far less generous than the amount normally paid, and National Savings is not the most generous organisation in the first place.

An extra pounds 3.36bn comes from inheritance money left to rot for years in bank or building society accounts. Life assurance policies which have matured and await collection chalk up a further pounds 1.9bn.

Whenever someone says they want to make investors' money "work harder" for them, I feel slightly queasy. I find it hard not to come up with mental images of little pounds 5 notes on steroids, dementedly racing round a gym to build up their puny muscles.

But there is no denying that, despite its self-interested style, IFA Promotion has a point.

Next week, millions of us will switch on our televisions and buy newspapers to discover what the Chancellor, Kenneth Clarke, has decided to do in his Budget. Mr Clarke's announcements will delight some, anger others and leave most of us unmoved. Foreign observers have often remarked how peculiarly British the entire affair is.

The combination of macro-economic policy, coupled with more down-to-earth decisions about fags, petrol and booze, is one of the few times when the vast majority of us are willing to entertain serious debate on financial issues.

Not for one minute should we get rid of any of this. But we should, never the less, get things in perspective. While Mr Clarke's penny on here and tuppence off there will make a real difference to our lives, it is also a fact that what might make as much difference is a touch more planning in our financial affairs.

For many, this will seem a meaningless proposition: what is there to plan about if you are a pensioner or long-term unemployed person on state benefits?

A fair point. But it is also true that a little planning - along with a little more money, to be sure - can help most people. The first step we might want to take is to sift through all the papers left mouldering for years in drawers and attics throughout the country.

That way, irrespective of Mr Clarke's pre-election giveaways, that long- forgotten policy might still ensure a nice little windfall.