The government has announced the creation of a new financial advice service that will combine the functions of the widely-criticised Money Advice Service (MAS) as well as two pension advice services.
The abolition of the MAS was announced in the March 2016 Budget. Official inquiries by the Commons Treasury Select Committee and the National Audit Office had criticised the service for waste and inefficiencies, and for failing to reach those who needed it most.
The new guidance body will also replace two pension advice services, The Pension Advisory Service (TPAS) and Pension Wise, which was created in conjunction with the pension freedoms introduced in 2015.
The government had considered setting up two new bodies – with plans to merge the two existing pension services, and to replace the MAS with a smaller, more streamlined debt advice service. However, after consultation with industry and consumer finance groups, the government says it has listened to concerns and believes a single guidance body will be the most effective way to reach people.
The Minister for Pensions, Richard Harrington, said: “A single guidance body will be more efficient and will help consumers make the right financial decisions, and we are committed to ensuring people can access the best free and impartial financial guidance possible.”
As of yet, the new body is unnamed and there is no timetable for its creation. Harrington added: “The next steps will involve consulting on the best way to design a single body model.”
Sian Williams, Head of National Services at Toynbee Hall says, “We are delighted at the news from government this weekend that from 2018 there will be a single public financial guidance body covering money and pensions guidance and debt advice. We, along with many others (the Financial Inclusion Commission, debt advice and money guidance agencies), have long been recommending this holistic approach, so it’s reassuring that government ministers are listening to the sector about how best to help people build lifelong financial health and resilience”.
In a corresponding blog post, Sian provides a more detailed analysis of what’s going to change and discusses how the government can move forward with a human-centered approach to policy and design. You can read her blog here.