Consumers will be able to find the help they need more easily on key financial matters with the creation of a new guidance body, the government says.
The Economic Secretary and the Minister for Pensions have announced plans to develop a new single public financial guidance body, which is responsible for delivering debt, money, and pensions guidance to the public.
This will see the roles of the current Money Advice Service (MAS), The Pensions Advisory Service (TPAS), and Pension Wise rolled into one. However, these services won't be dissolved until the new body is in place.
The government had initially planned a two-pronged approach, which involved replacing the MAS with a new, streamlined, money guidance body, and bringing TPAS and Pension Wise into a new, pension guidance body.
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But industry and consumer finance groups raised concerns about how two bodies might work together effectively and thought a single body would provide a better service for consumers.
The next step is for a consultation on the best way to design this new body to be launched. There aren't however any timescales on when this will be, or when the new service will be up and running.
The Economic Secretary to the Treasury, Simon Kirby, says: “We strongly believe that creating one public guidance body is the best way of making it as easy as possible for people to access the help they need to get their financial questions answered.”
‘A single body will remove unnecessary duplication’
Tom Selby, senior analyst at AJ Bell, comments: “Having three separate organisations delivering pensions guidance risked confusing savers and creating unnecessary costs, which inevitably fall on customers through higher prices. The MAS, in particular, has been widely criticised for wasting tens of millions of pounds on advertising and marketing campaigns.
“A single, unified pension guidance service – harnessing the best of all three organisations while removing unnecessary duplication – will provide critical support to the pension freedoms.”
However, Gillian Guy, chief executive of charity Citizens Advice, warns that the government needs to carefully consider how the new body will work. She says: “What's best for consumers needs to be at the centre of the changes to public financial guidance. It is important that there is a holistic approach to guidance and debt advice offering the opportunity for money, debt and pensions services to be interlinked so as to address people's financial queries as a whole.
“Government could also consider how guidance could be offered at key stages of people's lives – such as starting a new job or having a baby – so people get their questions answered when their finances change.”
Richard Parkin, head of pensions policy at Fidelity International, adds: “Thought will need to be given not just to the structure of the new body but how it will be promoted in a way that engages consumers so they see its relevance.”