Pension Palaver

During the budget in March 2014, the Chancellor launched radicle reforms of pensions to allow those retiring access to their pensions as a lump sum. Given the complexity of pensions for retirees, Gorgeous George stated that everybody would have access to ‘free advice’ to help with their pension decisions.

 

You can read more from my blog post from March: http://stevesmithlive.blogspot.co.uk/2014/03/advice-furor_25.html

 

To ensure I am not mistaken, I am a great advocate of people getting the right advice……especially those entering retirement. We are one of the few countries in the world that does not offer subsidies or tax breaks for such complex advice areas. Good advice leads to better decisions……leads to better financial positions of the population……leads to less reliant on the State. Simple.

 

However, the current system in the UK is broken and offers little support. This week I received a new enquiry from a prospective client about to retire. They informed me that:

 

“I called my pension provider, but they wouldn’t help and told me to get independent advice. I called the regulator’s helpline but they wouldn’t help and told me to get independent advice. I went to the Citizens Advice Bureau and they printed off a list of 20 financial advisers within a 10 mile radius of where I live”.  

 

I have heard this story 10 times this year already. Sad and pathetic really.

 

So it is with great interest and dare I say it……intrigue……that I have been waiting for George Osborne’s announcement on how this ‘free advice’ was to be delivered. I should have known better though……he will use exactly the same failed Government departments as now.

 

I just don’t get it……The dust has settled, consultation has been sort and 4 months have passed……this was not a knee jerk reaction. This was a considered response.   

 

The complexity of pensions means they have danger written all over them in the wrong hands. The solution is really obvious……either make pensions really simple so that the decision making process is easy OR offer financial subsidies / tax breaks to allow experts to support retirees with the financial decisions.

 

What we have actually got is £20 million being spent over the next 2 years on the same Government departments that are failing now.

 

I feel cheated George – you just don’t get it.   

 

“Insanity: doing the same thing over and over again and expecting different results.”

Albert Einstein