Age UK say that older people need regular “financial MOTs” to help them through their decades of retirement.
A report by the charity, titled ‘Financial Resilience in Later Life,’ argues that frequent financial check-ups are critical to help older people cope with retirement periods which could span to around 30 to 40 years, reports the Telegraph.
Within the report the say that instead of a singular “plan” for retirement, retirees’ financial planning should concentrate on building up resilience to shocks such as ill health, care needs or the death of a partner.
The report looks at Age UK’s Financial Services Commission, a series of three summits involving industry leaders, Government, consumer advocates and older people. It comes as the government aims to relax rules which involve pension pots and will give people more freedom to take their money as they wish.
From April next year, people aged over 55 with a defined contribution (DC) pension pot will be able to take it how they want, subject to their marginal rate of income tax. At present, people are charged 55% tax if they want to withdraw the whole pot.
Age UK have said they fear that there is likely to be a growing risk coming from scams and fake investment schemes following the changes.
Tom Wright, Age UK group chief executive and co-chairman of the Financial Services Commission, said, ”With retirement now often lasting 30 or 40 years – a third of your life – we’re in critical need of a radical new approach to making later life financially secure and comfortable. The concept of making one set of retirement plans at pension age is not fit for purpose. We believe a series of financial MOTs at significant points throughout retirement, together with a robust state and private pensions system, is the real way to help people make ends meet and live comfortably. We hope the financial services industry, regulators and Government who worked with us during the Commission will now act on the blueprint we’ve laid out as a result of our discussions so that people in Britain can feel financially prepared for and confident about their later lives.”
Pensions Minister Steve Webb said: ”I welcome Age UK’s role in spearheading the debate on what more we can do. The Pensions Bill which will be introduced into Parliament shortly will be a vehicle for the Government’s ongoing pensions revolution, and I look forward to driving through Parliament a number of further measures which will reflect the realities of our ageing society.”
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