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.
In March, the Chancellor announced some dramatic changes to the rules on how people can access their pension pots from defined contribution schemes in his budget. Age UK has just submitted its response to the Government’s formal consultation.
This guest blog was contributed by Keith Richards, Chief Executive of the Personal Finance Society
I have been involved in a series of consumer focused strategy meetings which formed part of a Financial Services Commission which was set up to examine how to improve financial resilience in later life – jointly chaired by Tom Wright, CEO of Age UK and Dr Alexander Scott CEO of the Chartered Insurance Institute.
Industry, consumer and regulatory leaders embraced the opportunity to debate and consider solutions to key later life financial challenges which included the dynamics of planning for later life, encouraging savings, changing public perception of industry trust, the development of good value and flexible financial products and increasing access to information and advice.
This guest blog was contributed by Laurence Baxter, Head of Policy and Research at the Chartered Insurance Institute (CII)
Having looked at the next generation of pensioners in the first roundtable entitled Is it too late to save, the Age UK Financial Services Commission then turned its attention on 6 February to the early to middle years of retirement. Hosted by Mercer, leaders from across the financial services industry debated a number of hot topics which are summarised below.
Managing early retirement while considering the longer term
Individuals in the first decade of retirement face the potential for economic, lifestyle and health shocks, underlying the importance of financial resilience for this group. One complexity was the different types of pension pots people have as a result of multiple employers. There is the transition from Defined Benefit to Defined Contribution, so some of pension pots will be final salary schemes while others are money-purchase. Changing patterns of retirement from a single watershed event to more of a process will also be significant.
While early retirement is not without its bends in the road, people in this group still need to be mindful of issues that could arise later in life such as long-term care and how or whether they use home equity.
This question was the starting point of Age UK’s first Financial Services Commission summit event on 6th December. It arose from forthcoming Age UK research which suggests that although those coming up to retirement are often seen as a wealthy and resilient generation, all but the most affluent face considerable challenges, and there is a widely prevalent feeling of uncertainty which deters saving.
The Commission – jointly chaired by Tom Wright, CEO of Age UK and Dr Alexander Scott CEO of the Chartered Insurance Institute – was set up to examine how to improve financial resilience in later life.
At the event (hosted by BlackRock, the investment management firm) Tom challenged senior figures from the financial services industry, consumer and regulatory organisations to give their recipe for improving financial resilience among the group approaching retirement. The debate ranged between those who feel we need to build trust in the financial services industry and those who pointed to supply-side failures. So far, so unsurprising. But there was a new mood of optimism and – dare I say it – realism. Continue reading “Financial resilience as we approach retirement: is it too late to save?”
We are “woefully underprepared” for our ageing society. That was the conclusion of the House of Lords Select Committee chaired by Lord Filkin earlier in the year.
Central to that is the fact that people just aren’t saving enough for retirement and their later life. New polling Age UK commissioned found that just under a quarter of people aged 50-64 – those rapidly approaching state pension age – think there’s no point saving. Worryingly, that’s not because the majority have
already made provision for their future. More than a quarter said they were worried about having enough to live on. Only 15 per cent thought they had saved enough already.
We also frequently hear from older people about the problems they face with money matters, and the lack of solutions that really work for older people. While auto-enrolment is a massive step forward, it will not have time to reap its full benefits for people close to retirement.
That’s why we’re launching the Financial Services Commission – which will be co-chaired by Tom Wright CEO of Age UK and Dr Alexander Scott of the Chartered Insurance Institute. Launching on December 5th, it will be take the form of a series of three summits in which we will work with key industry leaders and consumer experts to examine how to improve the “financial resilience” of older people – their ability to weather the challenges that might lie ahead. It will culminate in June next year with the publication of a roadmap of actions that regulators, government and industry need to take to help keep future and current pensioners financially resilient. Continue reading “Age UK establishes commission on financial services”