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MAS ‘money advice’ budget cut by 21%

The Money Advice Service’s budget for “money advice” services has been cut by 21 per cent, the FCA has confirmed.

In a paper on proposed fees and levies for 2015/16, the FCA says the MAS will raise £34.1m for delivering money advice and £47m for delivering debt advice services.

In 2014/15, the MAS had a budget of £43m for money advice and £34.5m for debt advice.

The MAS’s total budget remains unchanged from last year at £81.1m.

However, £2m of next year’s debt advice budget is being voluntarily contributed by the energy and water industries.

The FCA says: “To fund an increase in debt work, the annual money advice budget has been cut by £8.9m. This has been enabled by efficiencies, cuts to some budget lines such as printing, and reductions in above-the-line marketing (eg. TV and radio).”

The paper reveals levies paid for the MAS by advisers in the A13 fee block – which covers advisers who do not hold client money – will increase by 16 per cent. 

A13 advisers will pay £4.2m towards the MAS in 2015/16, up from £3.6m in 2014/15. 

In November 2013 the FCA proposed a 63 per cent hike in advisers’ MAS fees from £2.7m in 2013/14 to £4.4m for 2014/15, but the 2014/15 figure was later revised down to £3.6m. 

Last week a Treasury-commissioned report by former Consumer Focus chair Christine Farnish recommended the MAS slash its money advice budget in half.

MAS will publish its own business plan early next week, including details of its spending plans.

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