9th June 2016
The Financial Services Consumer Panel has warned that the abolition of the Money Advice Service (MAS) could leave consumers without a source of impartial financial guidance, and slow down progress on the UK’s financial capability strategy.
The panel advises the financial regulator, the Financial Conduct Authority on consumer matters. It says that more than 8.4 million people contacted MAS in 2014/2015, nearly double the previous year and says this is the result of years of brand awareness building. A majority were working-age, on incomes of £10,000 to £35,000 per year. They searched for information about everyday personal finance issues like mortgages, budgeting and savings and pensions.
Sue Lewis, chair of the Financial Services Consumer Panel, says: “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.
“The government appears to expect the MAS successor body to take responsibility for improving financial capability, but without saying where leadership for the UK strategy should lie, or what the governance arrangements should be. There are real risks for consumers in these proposals and we hope the government will consider the evidence carefully, including experience from overseas, before taking hasty and damaging action”.