Of all the announcements on the Budget, there was perhaps one that was missed, namely that the Money Advice Service (MAS) is no longer. Indeed the government backed service, made possible by a levy on the financial services industry, is to be restructured into a money guidance service. With millions of us in debt and struggling to understand even the most simple unsecured loan or mortgage product, MAS was the governments answer.
Many had criticised the service, especially those within the financial services sector who claimed that it offered guidance and not, as its name suggest, advice. There was also extensive criticism at the amount of money spent on marketing and promotion, as opposed to helping people, with some claiming it to be tens of millions.
However, as of last year when new leadership was installed the service was beginning to make a difference. It had reduced its outgoings and scrapped expensive marketing and advertising campaigns, focusing instead on financial education, but it looks like too little too late.
The Pensions Advisory Service and Pension Wise are also being replaced with a new guidance body for retirement. It is intended to simplify the retirement process and help people find the right financial product to best suit their circumstances. But it is essential that the MAS replacement service is correct this time.
Gillian Guy, chief executive of Citizens Advice stated “getting effective financial guidance to people early is key to improving household finances and economic security.” Individuals need financial help and guidance when at crucial points on their lives as well, not just when they are in debt or facing a crisis. People use loans, credit cards and mortgages every day, so the service should be there to help them, even if just to explain the difference between secured loans and unsecured loans.
Therein lies the major challenge for this government as it looks at the best way to replace, promote and introduce a new financial advice service that can be used by everyone.