The Money Advice Service is dead - help for those in need must not die with it

The service is to be scrapped and replaced by a new, slimmed-down money guidance body​

Simon Read
Friday 18 March 2016 23:31 GMT
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‘Getting financial guidance to people early is key to improving their security,’ said Gillian Guy
‘Getting financial guidance to people early is key to improving their security,’ said Gillian Guy

One of the Budget announcements you may have missed is that the often-maligned Money Advice Service is to be scrapped and replaced by a new, slimmed-down money guidance body.

The government-backed service – funded by cash raised from a levy on the financial services industry – has been much criticised for spending tens of millions on marketing rather than giving direct help to people who need it. The financial industry also criticised its title, pointing out that it offered guidance rather than financial advice.

However, under new leadership installed last year, the Money Advice Service was starting to look like it could make a difference. It was spending less on its fancy website and had scrapped all its expensive advertising campaigns. Instead the service had begun focusing on much more important areas, such as financial capability and financial education.

Allied to this change, the Treasury intends to replace the Pensions Advisory Service and Pension Wise with one new guidance body for retirement funding. That seems a sensible move as it should provide simplicity and make it easier for people to find the right pension help.

But it's crucial that the Government gets it right when replacing the Money Advice Service.

"Getting effective financial guidance to people early is key to improving household finances and economic security," said Gillian Guy, chief executive of Citizens Advice. Her view, which I agree with, is that financial help shouldn't just be offered when people hit crisis points. Britons should be able to call on assistance at all sorts of key moments in their lives, such as when they are being made redundant or having a baby.

That's the challenge for the Government as it looks at the best way to replace the Money Advice Service. The answer is to ensure that practical and trustworthy advice is easily available either face to face or over the phone when people need it.

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