HM Treasury  

Government to create single financial guidance body

Government to create single financial guidance body

The government will create a new, single body to offer guidance on debt, pensions and other financial matters.

It will bring together the functions of the Money Advice Service, The Pensions Advisory Service and Pension Wise into a single body.

Last year former chancellor George Osborne launched a consultation into the government’s guidance provision to create a more “joined-up approach”.

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His comments came after several reports were critical of the Money Advice Service.

In March 2015 an independent review stated the Money Advice Service needed to “reboot its business model” as part of wide-ranging changes.

The review by Christine Farnish, the former chief executive of the NAPF, said the service should focus on filling advice gaps in the market and avoid duplicating services which already exist.

Her proposed changes would have allowed the government to halve Mas’s £43m budget and would have involve the service instead giving out grants to fill advice gaps.

But now the government has announced that it has decided to create a single body to offer these services, it will consult on the model it should adopt.

Economic secretary to the Treasury Simon Kirby said: “Our government wants to give ordinary people more control over the lives, and that includes their financial security.

“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.”

One of the proposals the government had considered in its consultation was a voucher system.

This would have offered a government-backed voucher to pay for guidance from an accredited partner – a proposal previously put forward by the Personal Finance Society.

But this was rejected on the basis it would be inefficient and the government could struggle to make sure consumers got access to a consistent quality of guidance.

Pension Wise is currently offered by The Pensions Advisory Service, which runs the telephone service, and Citizens Advice, which runs the face-to-face sessions, and it is not clear yet whether this split would continue.

Gillian Guy, chief executive of Citizens Advice, said: “The right guidance can be an essential part of a secure financial future.

“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 - like starting a new job or having a baby - so people get their questions answered when their finances change.