Pensions Guidance body to be launched to help UK savers
A report on the website Money Marketing on the 7th of November 2017 charted the growing pains of the proposed new public guidance body on UK pensions.
The new organisation is planned to see the merger of the Pensions Advisory Service with the Money Advice Service and Pension Wise, although it is not expected to be up and running until this autumn. What is currently taxing the mind of civil servants at the Department for Work and Pensions (DWP) – which will be responsible for the new body – is the distinction between “advice” and “guidance”.
There is apparent concern about a blurring of the distinction between guidance – which tends more towards the simple provision of information – and advice, which suggests a recommended course of action.
In reality, of course, individuals using the proposed new service are unlikely to have any firm distinction in mind and may interpret any guidance or information they receive effectively as advice.
Why is a new body necessary?
The answer seems to be that too few people appear to understand their pensions, how best to make use of their accumulated pension pot and how to convert that source of funding into a regular monthly income to sustain them through their retirement.
As many as four out of every five members of the many pension schemes in existence in the UK suffer that fundamental lack of knowledge, according to research conducted by MFS Investment Management.
That lack of understanding is largely because of the complexity of many pension issues, including uncertainties over the distinction between defined contribution (DC) and defined benefit schemes (DB) against the background of considerable liberalisation of the rules and regulations governing the rights of savers to decide how to use their pension pots.
The choices currently being offered to members of pension schemes is also opening the door for less scrupulous operators to use scams of one kind of another to persuade savers to part with their heard-earned pensions.
Chief amongst such scams are those which attempt to persuade members of defined contribution schemes to transfer their funds into investments that appear – and almost certainly are – too good to be true. We reported on such activity in our previous newsletter, which echoed recent warnings on the subject issued by the Financial Conduct Authority (FCA).
So, this new body will help with proper retirement planning which will provide clarity for UK savers.
Independent Pension Specialists Limited (IPSL)
Of course, any publicly-funded and promoted guidance body on the subject of pensions and pension management is to be welcomed, and the merger of the Pensions Advisory Service and the Money Advice Service may help to serve that purpose.
For practical help from expert, independent financial advisers, however, you might want greater reassurance that your pension continues to work in your best financial interests for many years to come. And that means advice and guidance on all your options and a careful explanation of your current pension arrangements.
This is our role here at Independent Pension Specialists Limited (IPSL), where our expertise may help steer you through some potentially complicated and involved decisions, likely to affect your finances throughout your retirement.