Navigating the Maze of Personal Finance

Dr Lindsey Appleyard and Dr Harjit Sekhon, Centre for Business in Society

Recently the government announced the abolition of three free services that were designed to help guide consumers through the maze of personal financial services[1]. The three services being abolished, with the view to creating one overarching body, are the: Money Advice Service; Pensions Advice Service; and, Pension Wise.

The abolition of these services is happening at a time when financial services are going through a lot of change as a consequence of central government policies placing greater responsibility on the individual for their well-being. The changes have happened against a back drop which has witnessed interest rates at an historic low level meaning that savers have to go beyond bank deposits for a reasonable return. The age at which people can retire has increased, and so too has the number of years that people have to work before they can claim their full national pension (variable depending on the number of years that they pay National Insurance contributions).

Against what is a challenging backdrop we view the abolition of the three bodies as being a positive outcome for the users of the various services. Having one body will be better for consumers because there will be a joined-up landscape. As far as we can see, the creation of one body can have a number of important benefits, including being the custodian of information in a single focal point. As it stands, the current landscape is full of undulations with the result that consumers have to go to one body for one type of information and another for other information. Together, the various sources of information simply cause confusion for consumers who the services are meant to serve.

While the new body will undoubtedly help consumers as an independent body, there is still a place for other service providers to support consumers. For example, the Citizens Advice Bureau has a long and rich history of providing free and independent advice on range of issues and will continue to provide this. One particular area that Citizen Advice Bureau is known for is its advice service in relation to debt and debt management.

The emergence of the new body coupled with the advice that is already available means that customers should be better served. It will be less confusing and this step change in advice services means that independent bodies are in place. We hope that the new body is true to the original roots of the Money Advice Service with its emphasis on providing clear and impartial information in the complex maze of personal finance.

All in all, the new changes are welcome and are likely to have a positive effect by making it simpler for consumers to gain independent advice.




Coventry University