Money

Managing your money

Government help with your money management

Pound sign and arrows

Government plans for a national service offering consumers free guidance on managing their money aims to help people make better financial decisions, writes Holly Thomas

The proposed scheme, Money Guidance Pathfinder, will offer an impartial advice service to help people better manage their money.

It will offer information and guidance on budgeting, saving and borrowing, protection, retirement planning, tax and welfare benefits, and jargon busting.

But it will stop short of selling people specific products.

A £12 million backing from the Treasury means a pilot can go ahead with a view to it being widely available if it proves a success.

Otto Thoresen, chief executive of insurer Aegon UK, made recommendations for such a scheme in his newly published final report on generic financial advice.

It claims it will help make consumers £15 billion better off during the next 50 years.

It is thought that people will most want to use the service at important life events such as buying a house, having a baby, wondering what will happen to their finances after a divorce and approaching retirement.

The Pathfinder scheme would help support free advice services already available from charity Citizens Advice (CA), which is already running its own advice pilot project, Moneyplan.

Teresa Perchard at the CA said: "Moneyplan is showing that there is particular demand for a national service from people who are asset rich but cash poor, who need advice on dealing with pensions and who have queries about equity release and insurance.

"The recommendations in the review will, if implemented by government, make access to professional impartial financial advice something for all, not just those that can afford to pay for it."

But critics warned that the nationwide scheme, which will operate over the telephone, from advice centres, and perhaps even over the web might ignore regional issues and the different needs of people in a "one-size fits all" scheme.

Complex areas such as pensions, for example, might not be adequately covered by a wide ranging service.

Independent pensions expert Ros Altmann said retirement planning was based on in-depth analysis of an individual's financial status.

"Retirement products are very different from most others and the Government already has a dreadful record in trying to encourage private pension savings without explaining the risks properly.

"Will this generic advice be able to deal with such issues, in the face of our ludicrously complex pension system?"

* Holly Thomas is the deputy personal finance editor of the Daily Express and Sunday Express. Holly's opinions are her own and for general information only. Always seek independent financial advice.

 
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