An investigation into expanding the remit of Government-backed guidance service Pension Wise to all working people has cast further doubt over the future of the Money Advice Service.
Prime Minister David Cameron confirmed this week that Ros Altmann, the Government’s older workers’ tsar, would be made a peer and handed the role of minister responsible for financial consumer protection and education if the Conservatives win next month’s general election.
Altmann will lead a review for the party of the pension reforms, including the future of the MAS and whether a charge cap should be introduced on pension products.
She will also develop Pension Wise to offer financial education and guidance to working people, not just retirees, and look at how older consumers’ rights, especially in the mortgage market, can be improved.
Christine Farnish, the former chief executive of the National Association of Pension Funds, was appointed by the Treasury to spearhead a review of the MAS which last month called for a fundamental overhaul of the organisation.
She says an expanded Pension Wise would reduce the need for MAS to exist.
She says: “You don’t need two organisations providing these services. You need one organisation that knows what it’s doing to get stuck in and help consumers manage their money throughout their life.”
Farnish adds she expects Altmann’s own study of MAS to build on existing work, rather than revisit the conclusions of her report.
She says: “They will use the work that has been done as a starting point rather than having to plough the field yet again. And that’s good because with the new pension reforms, it does need to be looked at in the broader context.”
However, Informed Choice executive director Nick Bamford says he is frustrated by the suggestion of a further review encompassing the findings of the Farnish report, rather than a promise of action from government.
He says: “Sometimes it seems like there’s an agenda for the creation of stuff to review and critique, without actually delivering very much.
“We need someone who is a figurehead and what better person than Ros, but it would be nice to see some change and some action from government.”
Bamford adds the expansion of Pension Wise to workers is “a superb idea” but says this should be funded by government, rather than an industry levy.
A MAS spokeswoman declined to comment. Any changes to MAS’ remit would require a new government to enact primary legislation.
Government estimates for the current Pension Wise project suggest annual running costs will be £35m, of which advisers are set to pay £4.2m.
Georgina Partridge, founding partner, Plutus Wealth Management
It seems like a natural evolution for Pension Wise, but the questions are how quickly this can be done, how much it will cost and who will be paying for it?
You would question whether an adviser levy would be a fair way to subsidise that sort of project and what the outcomes would be.