The proposals, in the Treasury’s White Paper on banking reform, are for the body to be funded by levies collected from FSA-regulated and OFT-licensed firms as well as a range of other funding streams.
The Treasury has estimated the total cost of setting up and running the body will be £24m over a period of 52 years.
It would take a strategic lead on consumer education and information provision relating to personal finance.
The FSA would establish the authority’s board and chairman with the approval of the Treasury but it would be independent from the FSA.
The White Paper also reveals that the financial services industry will have to share costs of up to £2.7bn for the Government’s new money guidance service.
The generic advice scheme will cost between £1.4bn and £2.7bn. This will be shared between the Government and FSA and OFT firms.
Cicero Consulting director Iain Anderson says: “The question of who pays for money guidance has been posed since the Thoresen review. That question has now been answered and it will be interesting to see if the industry, perhaps cowed by the events of the past two years, will pick up the tab without a fight.”