Single financial and pension advice body given go-ahead

The government has set in motion legislation to create a new single financial guidance body bringing together the provision of advice for the public on debt, money and pensions, after a consultation showed strong support for the proposal to integrate the work of the existing three separate bodies

In December 2016 the Treasury consulted on replacing the Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise with a single source of information. This new body will provide and commission pensions guidance, money guidance and debt advice and will complement financial guidance provided by the third sector and industry.

In addition, it was proposed the body would have a strategic function, supporting and coordinating the creation of a UK wide strategy to improve the financial capability of the public, reduce problem debt and raise debt management skills, and enable the better co-ordination of financial education initiatives.

The single financial guidance body will not fund regulated financial advice, with the exception of debt advice, but would signpost consumers to other providers to ensure that consumers’ guidance and advice needs could be met.

The consultation closed on 13 February 2017, and the Treasury has now published details of the responses. These are broadly supportive of the overall approach. However, the government had proposed that any future body should only commission debt advice delivery from providers authorised by the Financial Conduct Authority (FCA).

Reponses noted that this would risk preventing the body from working with key providers of debt advice, such as local authorities, so this requirement has been amended to say the body should work with debt advice organisations that are either authorised by the FCA or are exempt from needing such authorisation.

On 22 June the government introduced the Financial Guidance and Claims Bill in the House of Lords. Part one of the Bill provides for a single financial guidance body which will replace MAS, TPAS and Pension Wise. The Bill also allows for the provision of funding to the devolved authorities for the cost of their locally commissioned debt advice.

The body will be set up in the Bill as an arm’s-length body, accountable to Parliament, and sponsored by the Department for Work and Pensions (DWP).

The legislative framework set out in the Bill will allow the body to adapt to people’s changing needs and prioritise services, where appropriate, on particular groups; respond to industry and policy changes and keep pace with technological advances to meet the information and guidance needs of people now and in the future; and ensure the service is efficient, avoiding unnecessary duplication, channelling as much funding as possible to front line delivery.

The single financial guidance body will be funded in the same way that MAS, TPAS and Pension Wise have been funded, from levies on the financial services industry and pension schemes. By rationalising the provision of services, the Treasury says it expects there to be long term operational efficiencies that will mean more funding can be channelled to front line delivery of debt advice, money and pensions guidance.

Public financial guidance review: consultation on a single body is here.

Creating a single financial guidance body: response to the consultation is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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