Last week my fellow director, Gill Forrester, and I headed to London to attend a reception at the Houses of Parliament, hosted by Metlife. The reception was to launch a report commissioned by Metlife on Flexibility in Retirement, written by Dr Ros Altmann CBE, following the major changes to pensions announced by the Government in this year’s Budget.
One of the special guests at the event was Andrea Leadsom MP, Economic Secretary to the Treasury. Also in attendance were the Pensions Minister, Steve Webb MP and MP for Cardiff North, Jonathan Evans. These MPs are all directly involved in changing and drafting new legislation that will have a huge impact on our clients and their retirements.
The messages from the speakers painted a very positive picture - they believe Government is working hard with the Financial Services Industry to make sure the new legislation has a positive effect for consumers. However, whilst flexibility in pensions is a step in the right direction, extreme care still needs to be taken. The need for proper bespoke advice remains extremely important.
It’s not just about recommending a pension product – people need to be asked the “right questions” in order that they can be given the “right answer”. Every single person has different hopes and dreams. We all look forward to our retirement as a time when we are free to be able to enjoy life without the constraints of having a day job to go to, but the detail looks very different from person to person. Good advice involves a discussion about goals and objectives, how much retirement will cost and how will it be paid for. What is the pension solution, how much risk will/can be taken and most importantly – will they run out of money?
This is something the Government desperately needs to get right, not just for consumers but for the Country as a whole. For many, their pensions are the only source of income in retirement, so making sure this lasts a lifetime is the top priority or the government could be picking up some very large bills in the future.