/ Money

How easy is it to plan for your retirement?

retirement plan

Some of you will be well practised in checking your savings and may even have a retirement savings plan in place. Others, however, will not. Guy Opperman MP, Minister for Pensions and Financial Inclusion, explains how consumers are being empowered in the pension industry to encourage people to save for their future.

Empowering consumers is the best way to ensure that any industry is fair, transparent and sustainable. That’s why I believe that you are best placed to make decisions about your future.

As Minister for Pensions and Financial Inclusion, my job is to make sure the right information is out there to support this. After all, no-one has a better insight into what you need for your future than you.

Planning for the future

Ensuring that people have access to high-quality and impartial guidance on retirement options is central to creating a pension industry that works for everyone.

Pension freedoms, introduced almost three years ago, were a crucial reform that gave people access to their hard earned savings and the ability to do what they saw fit with them.

Since then, a number of services have been set up to offer people free financial guidance, including outlining retirement options.

Many of you will make use of Which?’s pensions content and Money Helpline, but there’s also the government-backed services from Pension Wise, the Money Advice Service, The Pensions Advisory Service all offer crucial guidance to millions of people.

While I would urge anyone who is looking for advice on saving for the future or planning for retirement to use these services, I think we can do more.

Single Financial Guidance Body

I am working to make accessing these services easier and the creation of the new Single Financial Guidance Body will make accessing high quality, impartial information on your pension, finances and debt simpler.

This new body will bring together the functions of existing providers under one roof and offer support to people and every stage of their lives.

This is especially important as more than 9.4 million people are now saving into a workplace pension through automatic enrolment.

It’s crucial that this major reform goes hand in hand with access to the financial guidance that you need to build a more secure financial future – ensuring that the right help is out there for this new generation of savers.

Retirement plans

The more information you have the more control you have over your future. If you are approaching retirement, here are my three tips to help you with your financial plans:

1.Check for any lost savings: Check if you have any missing pension savings and documentation through the government’s Pensions Tracing Service
2.Find out how much State Pension you’re likely to get, and when
3.Contact Pension Wise to get guidance on your pension options -this is the government’s free and impartial guidance service.

This is a guest contribution by Guy Opperman MP, Minister for Pensions and Financial Inclusion. All views expressed here are Guy’s own and not necessarily also shared by Which?.

Where do you go for information and help with your pension savings? Do you have a financial plan in place for your retirement? How easy did you find it to plan for your retirement?

Do you have a financial plan in place for your retirement?

Yes (57%, 84 Votes)

No (43%, 64 Votes)

Total Voters: 148

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I am retired but probably like many other previously self-employed people I have a private pension but not large, I also have a company/employment pension plus my state pension. However, the self-employed in my experience do not enjoy rates which enable you to compete with company pensions, discounting of course employer contributions, although many companies have now discontinued their pension schemes. Isa and other savings rates are so low now that they are a waste of time, so if you have some personal savings to invest you have to enter the stocks and shares market with the subsequent risks.
My bank is Santander who do pay 1.5% net interest on balances up to £20,000, previously 3%, which is much better than other banks who pay interest on very low balances for only a year. Personally I don’t want to be changing my bank every year for virtually no gain. My age also now precludes me from joining long term savings schemes.
I would be interested to hear the views and experiences of other self-employed people.

I’d like to see a state-operated retirement savings scheme, properly ring-fenced, where we can put away untaxed pension contributions in investments and bonds with low operating costs and no nasty surprises – through NS&I perhaps. In addition to any employer scheme we might belong to. The prudent could then build up an additional pension. But we do need to be aware of the need to save for retirement and not rely on the taxpayer.

I’d also like to see all employer pension schemes, public and private, run without any public subsidy other than tax relief on contributions at the basic rate.

It will likely never happen in my lifetime. However, the people best placed to decide how best to invest money are professional moneymakers. I believe that there should be a return – for consumer benefit – to DB pensions.

The contribution rates by employees may have to be somewhat (yes somewhat, not hugely) greater than they have been in the past, and the actuarial calculations more conservative to avoid the ill-fated pensions holidays that employers were “awarded” for some years in the eighties, and for which they, or their successors, or sadly, their past employees, are now paying the penalty in the form of significantly increased contributions, substantially increased contributions/investment risk, and scaled back to PPF pension payments respectively.