The Money Advice Service (MAS) and two existing pension advice services will be merged into a single new Government-backed financial guidance body, which will provide free advice on a range of money matters including pensions and managing debt.
The Government had said it wanted two separate bodies to take over from the MAS, The Pensions Advisory Service and Pension Wise – one focusing on pensions, the other on other money guidance. But concerns over how they would work together effectively has led to a rethink.
Now the Government's decided a single body would be better placed to offer financial guidance to consumers, though there's no news yet on how it will actually work or when it's likely to be up and running.
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What is the Money Advice Service?
The MAS was set up in 2010 – it's an independent body which aims to help people who face problem debt and offer assistance to consumers in better understanding financial services.
However it's faced widespread criticism, with some saying it doesn't provide value for money. In March 2015, MoneySavingExpert.com founder Martin Lewis, who had been highly critical of the service in the past, joined a 'challenger panel' which was set up in a bid to make radical improvements.
When it was announced in March this year that the MAS was to be replaced, Martin said: "While I would have certainly welcomed its closure three years ago, now I think perhaps it should have been given 18 months to see if, now pointed in the right direction, it could have moved forward."
What does the Government say?
Simon Kirby, the Economic Secretary to the Treasury, says: "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."
Richard Harrington, Minister for Pensions, adds: "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."
What happens next?
There's no fixed timetable yet for when the new service will be launched, but the Government's said the next step will be to consult on the best way to design a single body for financial guidance. It says there now won't be any legislation to create new public financial guidance bodies in the forthcoming Pension Schemes Bill, as had been previously suggested.