The Conservative MP for Wyre Forest, Mark Garnier, said the Treasury’s independent review into Mas must seek to address whether the service has the experience and resource to deliver sufficient guidance to those considering their finances in retirement.
He said: “The changes to pensions announced in the Budget this year were profound, and they will create huge demand for pensions advice. My issue is that Mas doesn’t seem to be targeting the bulk middle ground; those who need IFAs but cannot afford them, but are not troubled enough to need Citizens’ Advice. What is its value added proposition?”
Mr Garnier’s comments came after the economic secretary to the Treasury, Andrea Leadsom, in May revealed details of an independent review of Mas led by Christine Farnish, chairman of Consumer Futures and former chief executive of the National Association of Pension Funds.
The review, which follows a Treasury select committee paper published last year and which is due to report by the end of this year, will assess the need for consumer education and advice.
It will also consider how effectively and efficiently Mas is meeting this need through its current approach and recommend improvements.
The scope of the review was roundly criticised by Andrew Tyrie, chairman of the Treasury Select Committee on Monday, who said it “appeared to omit several important issues”, including whether Mas should exist as a statutory body and whether its governance arrangements are “sufficiently robust”.
The original Treasury committee report also recommended the review question whether MAS should continue to exist, review whether its staff were overpaid and whether it had overspent on marketing in the past.
Sue Lewis, chairman of the Financial Services Consumer Panel and a former policy adviser on Mas to the Treasury, said that if the service was to be involved in the delivery of pensions guidance it must “get closer to the regulatory boundary of advice”.
She added: “There is a need to take people up to the point where they understand whether they might want to buy a mutual fund or an annuity, for example, and to tell them where to look for that.”
Caroline Rookes, chief executive of Mas, said: “We’re confident that this review will highlight what the service does every week to help hundreds of thousands of customers through high-quality, free and impartial money advice.”
Last week, Mas’s annuity comparison site malfunctioned, prompting Claire Goodwin, paraplanner at Oxford-based The Paraplanner, to tweet the service, which responded: “We’re working on it and hope to have it fixed shortly.”
|Original Money Advice Service statutory mandate|
• The understanding and knowledge of members of the public of financial matters, including
the UK financial system
• The ability of members of the public to manage their own financial affairs, including promoting awareness of the benefits of financial planning and promoting awareness