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Concerns raised over Money Advice Service abolition

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Written by: Paloma Kubiak
09/06/2016
A consumer panel has raised concerns that the abolition of the government’s Money Advice Service could leave millions without anywhere to go for impartial financial help.

In March’s Budget, the government revealed it would scrap the heavily-criticised Money Advice Service (MAS) which was only set up in 2010 to give free and impartial information on everyday personal finance issues such as mortgages, budgeting, savings and pensions.

The move came after a Treasury-commissioned report revealed it had massively overspent on its marketing campaign and not enough on delivering services.

Instead a new pensions guidance body and a new “slimmed down” money guidance body will be set up so consumers can access information, with the aim of implementing it in April 2018.

However today, the independent Financial Service Consumer Panel (FSCP) has raised concerns that its abolition “

‘Abolition of Money Advice Service “could leave consumers without a source of impartial financial guidance, and slow down progress on the UK’s financial capability strategy.”

More than 8.4 million people contacted MAS in 2014/15, nearly double the previous year, with the majority being working-age and on incomes between £10,000 and £35,000 per year.

The panel said the increase shows the “result of years of brand awareness building”.

Sue Lewis, chair of the Financial Services Consumer Panel, said: “The government has not explained how abolishing the MAS brand will improve consumer outcomes, nor said why it has rejected less disruptive options, such as strengthening MAS’s governance.

“MAS has been widely criticised in the past for its marketing spend, but the brand is now well known, and trusted. Losing it will leave millions of consumers unable to find impartial guidance, and the money spent on building the brand will have been wasted.”

Where else can you go for help?

Citizens Advice

Citizens Advice’s money arm helps millions of people every year with debt, housing, welfare and employment issues.

Its advice is free and impartial and delivered face-to-face at one of its 3,500 bureaux, over the phone or via email.

CAB says over the last few years there has been a significant rise in the number of people looking for debt advice.

Visit the Citizens Advice website for more information or call 03444 111 444 (for England) and 03444 77 20 20 (for Wales).

Money Advice Trust

The Money Advice Trust is a charity set up in 1991 to help people with debt problems.  It offers free, independent debt advice through National Debtline, which can be accessed over the phone, through the website or via webchat.

The charity also offers training to businesses which regularly come into contact with people in financial difficulty, such as banks and utility companies.

Last year, it supported 1.2 million people, either directly through its services or indirectly through its adviser training.

Call National Debtline free on 0808 808 4000 or visit the National Debtline site for more information.

Pension Wise

Pension Wise is the free, government-backed service set up to help people understand and navigate the pension freedom rules, which were introduced in April 2015 and gave people unlimited access to their pension pots.

The service is available over the phone or face-to-face and offers impartial guidance – it won’t recommend any products or tell you what to do with your money.

Around 28,300 had a Pension Wise appointment during the first six months of the pension freedoms.

You can book a free appointment at Pension Wise here.

StepChange

This is the UK’s leading debt charity which was first created in 1992. As it’s a charity, it’s not driven by profits or shareholders.

It offers fee-free debt advice on bankruptcy, equity release and mortgages and on Individual Voluntary Arrangements (IVA) by working with 100s of organisations such as banks, lenders, retailers, charities and utility companies to help those in need.

It helps people manage and repay their debt through tailored advice and offers practical solutions to help you overcome your debt problems such as through its completely anonymous Debt Remedy tool. Visit the StepChange site or call 0800 138 1111.

Pensions Advisory Service

This is a voluntary organisation that provides information about pensions, including how to save into a scheme, what to do when things change and what your retirement choices are. It also helps you make a complaint about your pension and lists common concerns from other savers.

There are also videos you can view for help. Visit the Pensions Advisory Service site for more information or call 0300 123 1047.

Independent Financial Advice

You can get advice from an Independent Financial Adviser for a fee. Websites such as Unbiased and VouchedFor are search engines allowing people to find whole-of-market financial advisers as well as independent mortgage brokers, solicitors or accountants.

See YourMoney.com’s guide on key points to consider when looking for financial advice.

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