The plans will merge the Pensions Advisory Service (TPAS), Pension Wise and the Money Advice Service (MAS) after the government decided to scrap earlier plans to create a separate debt body.
The British authorities said they made the decision following responses to a consultation on the plans, which included merging TPAS and Pension Wise into a new pensions advice body while spinning off MAS into a new debt service.
It said industry and consumer finance groups had raised concerns that two bodies would not be in the best interests of consumers.
“A single guidance body will be more efficient and will help consumers make the right financial decisions, and we are committed to ensuring people can access the best free and impartial financial guidance possible,” said Richard Harrington, the minister for pensions.
The government added it was now “consulting on the best way to design a single body mode”, noting that legislation around its creation would not be included in the upcoming Pensions Schemes Bill.
Work with IFAs
Tom Selby, senior analyst at online platform provider AJ Bell, welcomed the move, urging the government to work with regulated advisers when it comes to providing more complex advice.
“A single, unified pension guidance service – harnessing the best of all three organisations while removing unnecessary duplication – will provide critical support to the pension freedoms.
“It’s also vital that the new organisation builds strong links with regulated financial advisers. Ultimately guidance can only go so far and there needs to be clear signposting to regulated advice from the new guidance body.
“This must be accompanied by a clear explanation not just of the cost of advice, but of the value it can add to those making complex retirement choices,” he said.
Proving relevance
Richard Parkin, head of pensions policy at Fidelity International, described the announcement as “good news” but said the government must make sure consumers engage and see the benefits of the new service.
“Thought will need to be given not just to the structure of the new body but how it will be promoted in a way that engages consumers so they see its relevance.
“Having public guidance consolidated into a single organisation makes sense and we need to make sure it’s used. Our experience is that many have yet to appreciate the benefits of seeking expert help, especially around accessing pension savings,” he said.
