The Money Advice Service budget could be increased to fund a more comprehensive pensions service that compliments the Government’s guidance guarantee, according to former Treasury financial secretary Mark Hoban.
Speaking at a Reform event in London this morning, Hoban said the “Retirement Saver Service” would collect and store data provided by users for use in face-to-face and telephone guidance sessions, providing a service which is “much closer” to regulated advice.
He said the financial services industry should help MAS “flesh out the proposition” and that if the idea receives the backing of industry there is a “good argument” for increasing the industry levy to boost funding for the new service in future.
While people will be eligible for the Government’s guidance guarantee when they retire, Hoban said savers require help both before and after they retire.
He said the service should provide users with a breakdown of retirement options, including pros and cons for each option.
He said: ”Whilst MAS has had a difficult start, I believe there is merit in building on the work that MAS has already done to create a brand, an online presence and some of the building blocks of the Retirement Saver Service.
“It will require some bold thinking to extend its offer much closer to the regulatory boundary.”
Hoban said the new service would help people plan for their retirement more effectively than purely relying on a single session of guidance.
He said: “The collection of financial data and personal circumstances is the start of a journey for consumers. We need to prompt people to think more about their aspirations for retirement. What sort of lifestyle do they want? How long do they want to work?
“We can then use the data collected to give people insights into the choices they need to achieve their aspirations for their retirement. This should give them a framework within which they can make choices around savings that suit them and their families.”
MAS has come in for criticism for errors on its website. Responding to a question from Money Marketing about whether MAS is competent enough to deliver the service, Hoban said it should be a “gold standard service”.
He said: “I have criticesd MAS for not having a whole of market option for annuities on their website. They should be setting a standard for others to follow and given a very clear remit and focus it could give them the confidence and others in the same way the confidence to move as close as possible to the regulatory boundary.”
In June, several providers called for some of MAS’s marketing budget to be used to fund guidance.
Also responding to a question from Money Marketing, Hoban refused to be drawn on what part of its budget MAS should use to fund the new service. “It is a commercial decision,” he said.