Nikhil Rathi, chief executive of the FCA, has called on financial services firms to back financial education and support services to improve consumer capability.

Widening access via initiatives such as Targeted Support, without improving the financial capability of the most vulnerable, could leave consumers making more choices they do not feel ready to make, he said.

Mr Rathi, speaking to the Fair 4 All Finance’s Delivering Financial Inclusion Together Conference yesterday, said that FCA data shows that one in 10 adults were not confident in their ability to identify a potential scam, rising to 17% for those over the age of 75.

He said that the FCA and Government can do their bit to combat scams but without the industry building capability and expanding financial education, consumers may not make good decisions at the right time or for the right reasons.

He said that if capability was lifted to match the progress made on financial inclusion, scams will reduce.

Mr Rathi said: “Banks fund financial education in schools - around £7m each year. Many run initiatives to help excluded people open bank accounts.

“The task now is to expand that good work, so it is consistently ready and available for individuals. That means embedding support into product design, not tacking it on at the end.

“Employers have a unique role at the start of and during working life. But we must also reach those outside traditional employment - including self-employed. And do more to test and publish what works and what doesn’t.”

He added that the regulator has been “upfront” that its Targeted Support changes “may result in a worse outcome for some” but that it judged it to be a risk worth taking as, “not acting leaves millions facing the risk of no support when making key financial decisions.”

Financial Planning Today Analysis: As Nikhil Rathi says, financial capability is seriously lacking among the UK population and this is a major reasons so many people make poor financial decisions or find themselves the victims of scammers. Targeted Support is partly being introduced for these reasons. Good financial education starts in school and carries on so schools must get behind the drive to raise understanding of financial decision making. We need a wholesale shift to prepare young people for a life filled with financial apps, choices on mortgages and the like and planning for retirement. Britain's current financial knowledge and preparedness is woefully lacking.