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Money Advice Service eyes more funding

Money Advice Service eyes more funding

The Money Advice Service has said an expected increase in demand for debt advice will mean the body needs to be put on a more stable financial footing.

Its chief executive Caroline Rookes acknowledged a levy increase would be "extremely unpopular" and said she didn’t know if it would happen.

She said: “One of our big challenges next year and going forward will be on debt advice because all the signs are that personal debt could increase.

“There are far higher prices which are starting to come through, interest rate rises and there are no signs that people are borrowing less so personal debt may well increase.

“But on the supply side, local authorities are showing signs of reducing their financing for debt advice.

“We will be faced with a position where there is reducing supply but increasing demand."

She said next year the Mas wants to build a debt advice strategy with organisations across the sector.

"[This is] to look at what the demand and supply is but also to look very closely at things like the funding of debt advice and to make sure we have a coherent funding strategy,” she said.

The MAS's activities are split in two: the delivery of ‘money advice' and the provision of ‘debt advice'.

Advisers contribute to the former alongside all other regulated financial services firms, with banks and building societies funding the latter.

She said: “The question of debt is a big issue and it is going to be a bigger issue.”

In autumn 2018 the government plans to replace Mas and merge it with Pension Wise and The Pensions Advisory Service to create a single financial guidance body.

When he announced the plans last year, former chancellor George Osborne said this could create a more "joined-up" approach.

In December the guidance body published its business plan for 2017 to 2018 which said there will be a "decisive focus" on helping people in the "squeezed" and struggling" segments of society improve their money skills.

The squeezed are defined as working age consumers with significant financial commitments but relatively little provision for coping with income shocks.

Mas stated this segment overlaps with the so-called Jams - the just about managing - highlighted by the government as a group that need help to get on in life.