Money Advice Service (MAS) chief executive Caroline Rookes has warned gaps could form between new pensions and money guidance bodies when they are established.
In the Budget it was announced that government guidance services Pension Wise and the Pensions Advisory Service will merge, and MAS will be closed down in its current form in favour of a new body to be created by 2018.
This body will have roughly the same remit as MAS and this will be a non-departmental government body of the Treasury. The pension body will be run by the Department for Work and Pensions.
Speaking to New Model Adviser® today, Rookes (pictured) warned there was a risk that gaps could emerge between the two bodies.
‘We will deal with issues up to retirement, the pensions body will deal with issues post retirement. We have to make sure that works and there is the potential for a gap to form there,’ she said.
‘When it comes to retirement we don’t want people to start thinking about retirement when they reach 55 and can switch their funds. We want people to be thinking about retirement right from the word go, throughout their careers. We have to be clear about who is responsible for getting those messages out there and at the moment we are not clear.’
She said it was a difficult area to look at and it was really important to ensure the two bodies work closely with each other.
‘I think that’s a tricky area because you want people to be beginning with these things long before they get to 55 and access what is now Pension Wise. We have to find a way of making the two organisations cover the whole waterfront and people don’t fall down gaps,’ she said.
MAS said the number of people it helped would fall to 15 million as a result of cutting its marketing budget, compared to 26 million in 2015.
When asked, Rookes said it was possible that this number of people it offered guidance to, could be lower than expected.
‘It [15 million] is an estimate of what it might be. It could be lower but our experience is that we always underestimate the people who use our services,’ she said.