More than a third (41%) of respondents admitted not understand retirement saving following the pension changes announced in the 2014 Budget, according to research by Ros Altmann (pictured) and sponsored by MetLife.
The Flexibility in retirement – planning for change report, which conducted two separate surveys, among 2,531 working adults in March and 1,068 working adults in April, found that 24% of working adults said they plan to start making, or to increase, pension contributions after the Budget changes.
Altmann made a series of recommendations in the report, including:
- A National Retirement Guidance Network, to be launched from April 2015, to focus on those about to retire, before expanding into a wider National Wealth Service. This could be integrated into workplace pensions auto-enrolment, providing regular ‘financial wealth checks’ for all savers.
- A system of specialist lower-cost advice for people at retirement, with the government increasing the current £150-a-year tax allowance for employers that provide advice in the workplace.
- The development of new pension products, including Lifetime Pension Accounts, Pension Growth Funds maturing into Pension Income Funds, alternative types of annuities and fixed-term retirement bonds that include advanced, life-deferred annuities.
- The development of new products that integrate long-term care funding into pensions and long-term savings, with tax incentives that would kick-start saving for social care.
Altmann said: “To make the new freedoms work for individuals, a revolution in the provision of financial education, information and advice is required.
“There is a massive opportunity to be grasped by financial advisers and the industry.
“These regulatory changes could have a dramatic impact on the advice industry and provide greater protection for customers who would otherwise not have access to the service of an adviser.”
Dominic Grinstead, managing director of MetLife UK, added: “The UK has the opportunity to create a world-leading retirement and pensions system and Ros Altmann’s report provides a blueprint for how to achieve that.
“The outlook for financial services is genuinely exciting and MetLife is committed to playing its part in helping potentially deliver a more prosperous later life for millions of people.”