Government to launch new personal finance advice and pensions’ body

The Government has announced that pension and debt services should be combined, after originally wanting to launch two new guidance bodies.

The Government has announced that pension and debt services should be combined, after originally wanting to launch two new guidance bodies.  

 

After conducting a consultation on replacing the existing money advice and pension bodies, industry and consumer finance groups raised concerns about how two bodies would work together effectively, the Government has announced that it plans to create one organisation which will do both.

 

The new body will replace the Money Advice Service, Pensions Advisory Service (TPAS) and Pension Wise with the aim of creating a more holistic service for consumers, who are often confused about the repercussions of debt and the new pension freedoms. 

 

It was first announced that the Money Advice Service would be abolished in the Treasury’s March Budget, and would be replaced by 2018. 

 

The Money Advice Service was plagued by criticism from the financial sector which funded it, with seemingly conflicting claims that its marketing spend was too high and that it failed to raise public awareness of its services. Many also believed that it merely performed services already provided by other existing organisations in the commercial and charitable sectors. The new service will also be paid for by a levy from private financial services companies. 

 

No timeline has yet been given for when the organisation will be launched. Work will now begin on the design of the new model, which the Government has highlighted will be more “streamlined” then its forbearers.   

 

Debt Advice Foundation responded to the Governments original consultation on the future of MAS, calling for the organisation’s free Debt Advice Locator Tool, which helps consumers find free debt advice, to remain in place when the new body comes into existence.

 

David Rodger, CEO of Debt Advice Foundation said;

 

“MAS currently maintains an online register of credible, not-for-profit accredited organisations which enables consumers to access to free, tailored and good-quality advice.

 

“Debt Advice Foundation believes that losing this central register of accredited agencies will lead to an increase in vulnerable borrowers flowing to the fee-charging sector with an increase in their financial detriment. For example, a commercial debt management plan takes 17% longer on average to complete than a free plan provided by the not for profit sector, due to fees.

 

“I hope this new body will maintain a similar platform and continue to promote the charitable debt advice sector in its future endeavours.”