The Money Advice Service has reported a loss of £786,000 for the year 2014/15 and handed chief executive Caroline Rookes a £20,000 pay rise.
It marks the first time the MAS has made a loss since it was launched in 2010. In that time, levy income has more than doubled from an original take of £32m to £80.6m
However, both Rookes and corporate services director Lesley Robinson have been awarded pay rises. Rookes saw her total pay increase from £163,000 in 2013/14 to £180,000 in 2015/16 while Robinson took home £204,000, up from £187,000. All MAS executives are eligible for discretionary performance-related bonuses, set by the advice body at 15 per cent for 2014/15.
MAS levy income rose from £78.8m in 2013/14 to £80.6m and advisers will see their contributions to the service increase by a further 16 per cent over the coming year, with the sector’s levy rising from £3.6m to £4.2m.
Levy income for 2014/15 predominantly went to the money advice unit, which took in £42.6m, while £38m went to the debt advice business. However, the money advice unit recorded a loss of £1.4m while the debt advice business recorded a profit of £1.5m.
The loss was partly driven by increased demand for services, with the MAS reporting a surge of almost 90 per cent in numbers of people contacting the service over 2014/15, reaching 8.4m.
The MAS spent £45.5m on service delivery, up from £40.9m in 2013/14. Its money advice unit used the funds for 140,890 sessions of telephone, e-mail and webchat support – up from 107,644 in 2013/14 – and 95,084 face-to-face sessions – down from 102,720 last year.
The sum also funded 219,700 debt advice sessions in England and Wales at a cost of £29.4m. This represents a sharp increase in 2013/14’s equivalent of 163,000 sessions at a cost of £27.8m.
The MAS is currently constructing its response to an independent review that recommended dramatic reductions in its money advice programme.