The British government has announced that the Pensions Advisory Service (TPAS) – including Wise – and the Money Advice Service (MAS) are to be merged into a single body, responsible for offering advice on money, and debt issues to the public. According to the official statement released by the government, the change will make it much easier for consumers to access important financial advice.
George Osbourne had previously announced plans to ‘slim down’ the MAS and TPAS back in March, after which the Treasury began consulting what exactly should be done in the best interests of consumers. Early indications seem to point toward a new approach to the same two-body model as before, though in this instance with TPAS and Pension wise being combined into one body, with a new streamlined money guidance body replacing the MAS.
However, there were concerns as to how well or otherwise two separate bodies would work with one another, which led to the idea to bring them together as one. In the end, it was decided that this would be the best way to go, creating just a single body for all consumers in need of financial help and making it “as easy as possible” for important advice to be sought and obtained.
“Our government wants to give ordinary people more control over their 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,” said Economic Secretary to the Treasury, Simon Kirby.
While George Osbourne previously indicated that he wanted the new arrangement to begin as of April 2018, no information has yet been confirmed as to when the new body will enter the market.
While MAS, TPAS and Pension Wise are all available for use by the public free of charge, they represent a large and on-going cost for the financial advice industry. The industry partially funds the services, with the MAS having in particular been criticised heavily for spending too much money on expensive personnel and marketing. Speaking back in March, George Osbourne stated that the primary intention of the change was to “direct more funding to the front line” and get rid of any unnecessary “duplication of services”.
No clarification has yet been offered in terms of how funding will be allocated or who will be accountable for the new single body. As it stands, proposals have suggested a roadmap where the Treasury alone watches over the money guidance body, while the Department for Work andand the government itself are responsible for overseeing the new pensions guidance body.
“TISA hopes that by creating a single unified body the new guidance service will address some of the clear gaps in the service today, such as the need for debt advisers to warn people not to opt out of a workplaceif it would mean them losing the employer contribution and similarly those advising pensioners should always bring the value of their house into the discussion,” said, Director general of the Tax Incentivised Association (TISA), David Dalton-Brown.
“We see this as a positive step forward and will help consumers make the right financial decisions.”
For more information or simply ask a question, please do not hesitate to contact a member of the Haven IFA team today.