Liberal Democrat peer Lord Archy Kirkwood says the Money Advice Service is underfunded and risks being “swamped” with enquiries over the next five years.
The MAS has a total budget of £80.8m for 2012/13. Some £46.3m of this will be spent on delivering “money advice” and will be paid for through an FSA levy on the financial services industry.
The remaining £34.5m will spent on debt advice, reflecting the Government’s decision to move responsibility for debt advice to the MAS.
Speaking at a debate on small pension funds in the House of Lords earleir this week, Lord Kirkwood said : “I am worried about the Money Advice Service. Since April it has had responsibility for debt counselling across the United Kingdom.
“It has a budget of £80m. That sounds like a lot of money but when universal credit comes into being over the next five years or so I think that it will be swamped.
“The point I am making is that if the FSA levy produces £80m it will need to be monitored quite carefully. The Money Advice Service is now in a crucially important position to help people with Omo questions and decumulation issues as they approach retirement; it is an essential co-part of its work.
“I do not think it is properly resourced at the moment for the future demands that will be placed on it.”