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Hoban: MAS budget could rise to fund ‘Retirement Saver Service’

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.


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Mark Hoban, I lovely statement, will the Government be paying?

    This is not a commercial enterprise, we pay, its taking our potential consumers, cost our clients money and adds next to no value. Its not advice its guidance, the chancellor was attacked for making such a statement in the spring budget. Its guidance not advice, if advice it is regulated!

    As usual ill thought through and little substance.

  2. So let’s get this right: the fees I charge my clients will, in part, be used to fund the levy I pay to MAS (or the Retirement Savers Service) which will provide free guidance/’advice’. Sounds like a cross-subsidy to me.

  3. I thought this guy was now Minister of State for Employment. Maybe he should occupy that space with his observations and move on from the days when he was Treasury financial secretary …We have!

  4. One begins to understand how the proverbial Peter felt, when as a hostage to fortune, he was robbed in order to pay Paul’s bills……..

  5. So let me get this right !

    My clients who pay for advice have now got to pay (increase in cost for me via increased costs for MAS so I pass on those costs to my clients) for the ones who don’t wont to pay for advice(sorry guidance).

    And am I right in saying Hoban distanced his self from MAS not that long ago ? is your head filled with marshmallow’s Mark ?

  6. I thought this guy was working at McDonald’s after failing his

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