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Would you like a financial MOT?

Stethoscope on credit card

Lucy Malenczuk, policy adviser at Age UK, asks how we should keep our finances in check as approach retirement. In this guest post, Age UK explore the findings of their retirement research…

Age UK has just published the findings of its Financial Services Commission, held jointly with the Chartered Insurance Institute. The Commission looked at what the financial services industry, government and regulators could do to make help people remain financially resilient in later life.

We used the term ‘resilient’ because we know from the people who contact us that even those who have saved for their retirement experience shocks, such as divorce, bereavement and poor health that can derail plans overnight.

We looked at the challenges people face from pre-retirement onwards. Amongst other things, we investigated whether the common perception of financially comfortable ‘baby boomers’ who are now approaching retirement is correct (it’s not) and asked whether the industry is ready for population change. Those aged 85+ are expected to be the fastest growing group in the UK but are they also among the worst served by financial services?

However, some of the most heated debates have been around how to provide financial information and advice. Some people are already very well served by regulated financial advisers, but most either can’t afford them or choose not to use them for other reasons.

Making  financial checkups the norm

Many people also need broader advice than a regulated financial adviser would usually offer, for example they may need to know more about their housing or working options or other forms of support available to them before they can make a sensible financial decision.

Others may need support to get their papers together and understand them. Age UK believes that the Government’s changes to pensions and the new Care Act represent a great opportunity to join up the advice available to people in later life and make regular financial checkups the norm.

This should start well before retirement, possibly as part of the mid-career review which has been piloted by the Department for Business, Innovation and Skills and should continue to be available after retirement to make sure that people can make the most of their savings and have independent and good quality advice if they need to pay for care.

So, would you like a financial MOT and if so what should it look like? Do you think banks treat their older customers well? What are the most important changes you’d like to see in the financial services industry to make it easier for people to help themselves to make the most of their money in later life?

Which? Conversation provides guest spots to external contributors. This is from Lucy Malenczuk, policy adviser at Age UK. All opinions expressed here are Lucy’s own, not necessarily those of Which?.

Andy Checketts says:
4 July 2014

Hi Yes I would welcome a finical health check provided:

1. It’s confidential.
2. No or little cost.
3. No pressure sales to follow
4. Done by reliable INDEPENDENT experts.
5. Brief written summary and recommendations/considerations included in plain English.

Is Which? in a position to develop sic a scheme?

I think many people have no idea of how much capital they need to accumulate in order to produce even a modest pension. Educating people about the basics and telling them how much better retirement is with a private pension is the beginning. So many people think it isn’t worth saving for a pension and many other don’t think about it at all. It really makes a difference, I was persuaded against my inclination to save for a pension and now in retirement I am so glad I was persuaded.

Yes please.

I had “reviews” when younger (in my 20s) and was mis-sold various pension things and that has destroyed all my trust in the financial sector. Later, once I thought I’d learnt a little, I’d “challenge” the advice a little too much (due to lack of trust) and lost out on products that would have been good for me.

I’m now 50. The nice salesman that sold me an endowment policy just over 25 years ago was wrong – it did not pay off the mortgage with a large surplus that would allow me to retire early.

So … PLEASE … give me a, proven, trustworthy, contact (who is not trying to sell me anything) to check my plans are in order … for retiring in 15 years time.

Frank Terapin says:
6 July 2014

Having bought 3 endowments to cover various mortgages after being told they would not only repay them but also provide a nest egg, I also ended with massive shortfalls. The actions of the banks over the last few years proves that financial services is still a wholly corrupt industry with the morals of the gutter – the elderly are a prime target for their activities and we must remember that IFA’s and the like are solely concerned with furthering their own interests. From my own recent experiences, IFA’s have no more expertise than the average person could gain from reading a magazine!

Jeff Evans says:
8 July 2014

My experience is that every bit of professional financial advice given over 35 years has failed me. The industry can’t be trusted to do anything except look after its own interests. And the government appear to be complicit in this.

I would concur exactly with Jeff Evans, although I could add a few more years to his 35.
Apart from a unit trust investment over 40 years ago, I would have been better off following my own instincts in all cases.

I now treat all financial advisors with more caution than I would a Doberman Pinscher with rabies

Cesira says:
26 July 2014

The central element of a financial MOT for the 99% of whatever age is a document which describes what social insurance provides what safety net, for how much, how long and how to apply.
Such a common sense MOT will not be provided by government because it is political party sensitive. Instead they bury us in pamphlets. Nonetheless, it is far more important that all this savings products business which benefit only the 1%.

For example, we supposedly have a national health service but few understand how much money is skimmed off by private provides, like Virgin Health, and how deteriorated services for chronic care such as arthritis is (you won’t have to wait more than 13 weeks to ….this is a deterioration which can be document by reference to the last time it was published as ..nor more than 9 weeks..) and so forth.

The 99% paid out roughly 10% of their income for the whole of their working life for insurances against calamities that can hit us all, including the NHS if you are sick, the dole and Job centers if you are unemployed, etc–. If you take an average manual worker, employed from the age of 15 to the age of 60 that is 45 years of full time work, the inflation adjusted take by government is about £90,000–that is a big insurance policy which is totally ignored in all this ‘finance’ jazz. and btw, I am professor of the subject so I know whereof I speak.

As a newbie to Money Which i am reluctant to say what helps me over the years burI have no difficulty in
Changing bank accounts
Monitoring income /spending
Giving solid advice on Mortage Market Review to our daughter
And so on

The golden rule on money investing is if you don’t understanit what is being said walk away
I will be 78 in September.. Opening a bottle of Bollinger You Bet!!

A couple of years ago my wife and I paid off our funeral in advanced nearly £9000 for the two of us, Now both my wife and I are both retired and with our pensions we own our house but it’s like everything else we have our community charge for our house and we have gas control heating but we can’t afford to run it. It’s only being used for hot water. But it’s like other people we have other bills to pay each month. At this moment we look after each other but I know one of us is going first, that will leave my wife or myself it’s then it will be more difficult to look after your self.