HC 271 Money Advice Service

Written evidence submitted by National Association of Student Money Advisers (NASMA)

Executive Summary

1. We welcome the opportunity to contribute to the Treasury Select Committee terms of reference inquiry regarding whether the Money Advice Service (MAS) is meeting its core statutory objectives.

2. As the professional body for student money advisers and fund/bursary administrators we take a keen interest in the MAS work to enhance the understanding and knowledge of members of the public on financial matters (including the UK financial system), and to enhance the ability of members of the public to manage their own financial affairs.

3. By the MAS opting to no longer work with a range of intermediaries, we are concerned about a risk that MAS will not reach its target audience, particularly as some groups are harder to reach than others. Students do not sit neatly in to any other group, and we are concerned that institutions could be mistaken in making the assumption that financial capability work with students is no longer important to the government. While those working in the sector realise that this work must continue neither OFFA nor HEFCE mention financial capability activities as being essential to the success of widening participation, retention or progression.

4. By reviewing their move away from work with external bodies and instead re-engaging with those best placed to reach different sections of society, the MAS will be better placed to achieve their aims of improving the overall understanding and knowledge of the UK population in relation to financial matters. By working with NASMA to encourage more students to engage at an institutional level, ideally in compulsory on-course activities, we have an ideal opportunity to continue to reach 7 million adults, many of whom may not be reached in any other way should this work be discontinued.

Introduction to NASMA

5. The National Association of Student Money Advisers (NASMA) is the professional membership body which acts as a focus for information exchange between practitioners in the field of student funding, bringing together professionals from across the sector and encouraging the free exchange of ideas. We work closely with national decision makers and their influencers on student finance policy. In addition we work with other relevant sector organisations to promote the needs of students and our members. 

6. NASMA has over 600 members across all four countries in the UK and collectively members are recognised as the leading authority on all matters relating to student advice and funding.

7. NASMA have worked closely with the Money Advice Service for a considerable period. Initially through a shared commitment to improving the financial capability of young adults. In addition the MAS funded a post at NASMA to support the development of financial capability initiatives in Higher Education and subsequently NASMA have delivered a contract from MAS to manage the final year of the Money Doctors project. This project is a financial capability strand of education aimed specifically at higher education students. Part of this contract is also to ensure a legacy for the financial capability work undertaken by Money Doctors developed under the FSA, CFEB and now MAS. This work started in 2006 and was initially introduced from an idea initiated by money advisers and other staff working at Roehampton University.

NASMA comments for the inquiry 

8. The MAS plays a crucial role in trying to enhance the understanding and knowledge of members of the public on financial matters. While we recognise the importance of online direct to client advice, it is important that the MAS remains committed to engaging with external organisations working closely with different sections of society in variable and appropriate ways to ensure that the centralised information being provided is fit for purpose and appropriately targeted to meet the requirements of these different sections.

9. The Money Doctors project, previously supported by the MAS, has seen considerable progress in engaging both staff and students and in recognising the importance of these activities aimed at improving the financial capability of UK students. Whilst a broad range of this work was already being undertaken by NASMA members and money advisers more generally, the Money Doctors project assisted practitioners by raising awareness and gaining considerable momentum within their institutions thanks to the partnership working approach. The support for the development of materials provided through the involvement and funding of the MAS also assisted in a more joined up and sector wide approach rather than piecemeal and isolated interventions.

10. In addition we can provide examples of institutions that were able to secure additional staffing and resources as a direct result of their engagement with the Money Doctors project, thus enhancing the institutional support for students.

11. The frequent and on-going discussions between the MAS and NASMA ensured that work undertaken by both parties contributed to and complimented each other, rather than a duplication of effort and resource provision. It is crucial that moving forward the work of MAS and NASMA continue to sit together when considering information for students/young people.

12. We should remember that there are 7 million students in the UK (NUS, 2012). These students can be aged from 17 through to pensionable age, are studying both full- and part-time, on undergraduate and postgraduate courses. The student body is diverse and representation can be found from all aspects of society. This highlights the importance of the MAS engaging with external professional bodies such as NASMA on an on-going basis if they are to have any success in meeting their core statutory objectives.

13. We should not assume that just because students are remaining engaged in education on some level that they will automatically be financially capable and that they will also understand their financial options. By making these assumptions we are missing opportunities to raise awareness and financial literacy levels to a captive audience.

14. By no longer opting to work with organisations such as NASMA directly it is easy for senior management teams within HEIs to make assumptions and think that this work is no longer a national priority, is of low importance or not relevant, which is clearly not accurate. Without continued national high profile support it will be all too easy for the excellent practices embedded in services over the past 6 years to fall away, resulting in a risk to the ongoing financial capability of young people across the UK.

15. NASMA have increased their engagement with organisations across the financial sector over the past four years, supported frequently by the MAS. This engagement has been crucial in breaking down some of the myths associated with the student population and perceptions about student money management. Given the ongoing pressure on finances for the majority of the UK it is imperative that the financial sector continue to see the benefit of reaching students at an institutional level, through a variety of delivery methods, and not be led to believe that due to the repositioning of the MAS and increased online information provision that students are no longer a priority target area. The MAS has a crucial role to play and should work with others to achieve its core statutory objectives.

May 2012

Prepared 15th June 2012