Under UK Government plans, announced in October, the single guidance body will bring together pensions, debt advice and money guidance.
It will work with the financial services sector, pensions industry, charities and government departments to help people get the right information and guidance that they need.
It will not, however, provide or support any form of regulated financial advice, with the sole exception of funding those delivering regulated debt advice.
Remit
Scheduled to be in place no earlier than autumn 2018, the guidance body will be responsible for:
- debt advice for those in debt problems;
- guidance and information on matters relating to occupational or personal pensions; accessing defined contribution pots, and planning for retirement;
- providing information to help consumers avoid financial fraud and scams;
- guidance on wider money matters and co-ordinating and influencing efforts to improve financial capability; and,
- the co-ordination of non-governmental financial education programmes for children and young people.
Funding
Currently, MAS is funded by two separate levies on the financial services industry, with Pension Wise funded by a third.
TPAS receives grant-in-aid from the Department for Work and Pensions (DWP), which is recovered from the general levy on pensions schemes.
The government, in its consultation paper, concluded that a levy model is still the most appropriate was to fund the guidance body.
The amounts charged are expected to remain in line with current levels. However, efficiencies generated from merging three organisations into a single body could reduce the overall cost over time.
Disjointed advice
Tom Selby, senior analyst at AJ Bell said: “Financial guidance, particularly in relation to pensions, has become increasingly disjointed, with three major levy-funded organisations operating in the pensions space. The government has now recognised this approach is inefficient and potentially confusing for savers.
“Moving to a single guidance body should reduce the costs paid by the industry – and ultimately by consumers who buy products and services – and create a simpler system.”
Describing the move as a more “coherent approach” by Tobin Ashby, insurance expert at law firm Pinsent Masons, he added that “customers will look at their financial position as a whole and so it makes sense to reflect that in any public guidance”.
Budget 2016
When it was first announced at Budget 2016, the government planned to replace MAS with a new money guidance body and bring together TPAS and Pension Wise as a pensions guidance body.
Responding to industry feedback, the government subsequently concluded “that it will be more effective to create a new statutory body, transferring the best features of the existing services to the new body”.
The consultation will run until 13 February 2017. Ahead of the introduction of the new body, MAS, TPAS, and Pension Wise will continue to operate as normal.
