Yesterday, Age UK launched a new report, Financial resilience in later life, which calls for regular financial check-ups for the retired and people approaching pension age. Age UK believes that these check-ups are critical to help the growing number of people aged 60 and over navigate later life.
The report is the culmination of Age UK’s Financial Services Commission, a series of three summits involving industry leaders, Government, consumer advocates and older people. Inspired by Lord Filkin’s warning last year that Government and society are ‘woefully unprepared for the UK’s ageing population’, the Commission’s objective was to devise ways to help people manage and prepare for retirement now that they are living longer than ever.
Steve Webb, the Pensions Minister, was the keynote speaker at the report launch. Also in attendance were many senior leaders from across the financial services industry and consumer groups. Speakers included Fiona Dunsire, Chief Executive of Mercer, Tony Stenning, MD of UK Retail at BlackRock, Sarah Pennells, Founder and editor of Savvywoman.co.uk, and the host of the event, Dr Alexander Scott, Chief Executive of the Chartered Insurance Institute and co-chair of Age UK’s Financial Services Commission.
Age UK is very grateful to them all and pleased that some of the participants from our deliberative sessions with older people were able to come too.
AGE UK IS SPEARHEADING THE DEBATE
In an entertaining and thought-provoking speech, Steve Webb welcomed the holistic nature of the report and Age UK’s role in “spearheading the debate” on what more we can do to support the financial resilience of our ageing society.
The Q&A session with the panel was wide-ranging, including the future of annuities, advice and guidance, women’s fear of locking money away for pensions, the role of focused advice, building defaults into products, and the issues with funding care.
The Pensions Minister acknowledged our argument that while State Pension and auto-enrolment reforms were welcome, things will get worse before they get better. However, he thought that we had reached a turning point and noted that the Government has taken steps through its State Pension reforms to boost support for women in their late fifties and the self-employed.
The Minister committed to making it the norm to give everybody the right to request flexible working. He also wants to ensure that “a year at home with kids is worth as much as time working at a FTSE 100 company”.
Commenting on the radical pensions announcements in the Chancellor’s 2014 Budget, the Minister revealed that the reason a pageboy fainted during the Queen’s speech was because of the shock of finding out that there were not one, but two pensions bills planned!
REGULAR FINANCIAL MOTS
On a more serious note, the pensions changes make the Commission’s calls for regular ‘financial MOTs’ in later life particularly pertinent. This means a holistic, joined-up retirement guidance journey throughout later life, so that people can have regular financial check-ups approaching and during retirement.
Some movement towards this is already taking place. The Department for Business, Innovation and Skills has recently piloted a Mid-life Career Review; the new guidance guarantee starts next April and we’d like to see the development of a ‘care navigator’. If these three touch points could be cohesively linked, it could genuinely strengthen everyone’s financial resilience in later life.
Among the report’s other recommendations are calls for better products and services to support our longer, more complex lives; a cross-Government-commissioned review into the long-term savings and pensions market, to develop a more coherent policy for annuities, pensions, tax relief and NISAs; and a call for the industry to recognise the importance of the growing market of older people.
The Government, society and individuals all need to play their part in preparing for and maintaining a decent standard of living in later life. The financial services industry has a pivotal role to play in engaging with individuals and delivering solutions that enable people to build up and maintain their financial resilience throughout later life.
This won’t be the last Age UK has to say on the subject of financial resilience. We’ll be considering how we can ensure our recommendations bear fruit, but in the meantime you can download a full copy of the report from the Age UK website.