MAS' new debt advice remit doubles costs to £87m

The financial services industry will pay an extra £40m toward the Money Advice Service (MAS) after it agreed to take on responsibility for coordinating and providing debt advice.

The total estimated cost of running the MAS in 2012/13 will be £86.8m, comprising the £46.3m cost of continuing with its existing services and the extra £40.5m cost of providing debt advice.

Most of the levy will be met by the government and secured lenders, the FSA said, with unsecured lenders and other businesses, including advisory firms, contributing the remainder.

Firms in the A13 fee block - made up mostly of adviser businesses which do not hold client money - will pay £153.88 per adviser, down from the current £160.79.

The MAS' new debt advice remit was signalled by the government last year. It makes the organisation responsible for coordinating existing debt advice services, including the Citizens Advice Bureau.

It will also be tasked with developing a more sustainable and efficient way of funding and delivering debt advice.

Tony Hobman, chief executive of the MAS, said: "Demand for our Service is clear. In the seven months since its launch, the ‘health check' - our online money planner - has received over 400,000 visits and is on track to hit its target of 500,000.

"Since April 2011 we have also provided money advice through 116,000 telephone and face-to-face sessions.

"We have come a long way, but there's a lot more to do. We are highly ambitious for the Service in 2012/13 and beyond, to achieve our vision to enhance people's lives because they take control of their money as a matter of course."