New plans for private pensions – Age UK’s response

Scrabble pieces spelling the work 'pension'

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.

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Guest blog – Financial Resilience at Retirement: Maximising Income

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.

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Financial resilience as we approach retirement: is it too late to save?

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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?”