A welcome help for savers but no gains for the poorest pensioners says Caroline Abrahams, Charity Director, Age UK.
Our rigid pensions system has become increasingly out of step with the reality of contemporary working lives so we hope that the more flexible approach announced today will revitalise pension saving, giving younger age groups more hope of future security in retirement.
We particularly applaud the immediate changes announced today that will allow the millions with several small pension pots to draw their money in cash – it’s a move Age UK has been campaigning for over many years.
We are also very pleased that guidelines are to be introduced to offer pensioners and those approaching pension age impartial face to face financial advice. Giving people a real choice about how and when to use their pension savings is the right approach, but it must be an informed choice so the advice available to them when they make this crucial decision needs to be first rate. Making this a reality will be central to the success of the reforms and we look forward to working with the Government and the financial services industry to make sure this happens.
Radical as these changes are, it’s important to recognise that they are not a panacea. If you are one of the 160,000 pensioners living in poverty in Scotland, this budget will have done nothing to help you cope with rising living costs. Nor will it do anything to reduce the crisis in social care that has seen the number of older people receiving support falling by more than a quarter since 2005
Furthermore, we know that people regularly underestimate how long they will live and people retiring now often have immediate calls on their savings such as interest-only mortgages and debts to pay off. Work needs to start now to ensure these people will have assets to support them in very old age, that free financial advice is of a consistently high standard, and that the industry develops some good value financial options so people get the certainty they need for security in later life.
If you are have questions about your own finances or just need a friendly ear, phone us at the Silver Line Scotland on 0800 4 70 80 90