The Money Advice Service (Mas) has allocated £500,000 towards the cost of transitioning to the government’s new single guidance body.
In its business plan for the coming year the body proposed to raise its budget to £27.2m for money advice, up £0.2m on last year, despite its expected exit from the market in the coming year.
The extra £200,000 is part of a £500,000 one off cost for transitioning to the new guidance body, Mas said.
It also proposed to raised its debt levy, which is not funded by advisers, by £8.3m to £48m.
Mas, together with The Pensions Advisory Service and Pension Wise, will transition to a new single body, funded through existing levies on pension schemes and the financial services industry, in the autumn.
The bill, on which the new body will be based, is currently on its way through parliament and is expected to enter the House of Commons in the beginning of the year.
The new single body will offer guidance on pensions, debt and other money issues.
Mas said in its business plan the £0.5m would fund transition projects and professional and legal fees to support the transfer of staff, information, knowledge, processes, assets and liabilities, as well as closing MAS as a legal entity.
In particular, the costs involve the migration of HR practices, policies & procedures, the termination and renewals of contracts, putting together the final accounts, transfer processes and knowledge, and putting in place the legal structures for closing down Mas.
Mas had come under fire from MPs in the past for spending too much money on marketing and duplicating others’ services.
An independent review in 2015 stated Mas needed to “reboot its business model” as part of wide-ranging changes.
In December last year the government released its view that the best future model for Mas would be to be integrated into a single financial guidance body responsible for delivering money, debt, and pensions guidance.
In its business plan out today (19 December) Mas proposed to advance its financial capability strategy to ensure interventions improve the money management skills of people across the UK.
It will focus its funded educational “What Works” initiative on understanding ways of encouraging people to save via the workplace and how fin tech can improve money management behaviour, it said.
It also wants to develop plans to commission and fund interventions to build the financial capability of working adults, children and young people.
Chief executive Charles Counsell, who took over from Caroline Rookes earlier this year, said: “We are pleased to publish a set of priorities and proposals that build on the real progress the Money Advice Service has made and we look forward to how we can build on this momentum over the coming year.
“It is in the Money Advice Service’s DNA that we test and build an evidence base before we commission, and this business plan sets out how we intend to do that across debt and financial capability for working age adults and children and young people.”
He added: “It is important to state that despite the fact that MAS will cease to exist legally during the year, we have agreed with government and the Financial Conduct Authority that this plan should be a full-year plan.”
Despite this Mas plans to reduce funding allocated to thought leadership, piloting interventions and coordination of What Works, while increasing funds to offline services and its website and support services such as change management to comply with new data protection rules.
Mas is also proposing to increase funding of debt advice by £8m in order to reach up to 90,000 more people and support a focus on driving up quality.
The funding, subject to approval by the FCA, will be ring fenced until the initial conclusions of the independent review of debt funding are known.
Mas launched a five-year debt commissioning strategy in December that sets out its plans to make sure debt advice services target those most in need.
carmen.reichman@ft.com
