Need Pension Advice? While the new Pension Freedom provides individuals with a greater choice about the way they handle their pension provision, those freedoms come with a catch. Already there have been concerns that some consumers are being charged unreasonable fees for releasing funds from their pension plans.
There is also, arguably, a greater responsibility on employers to facilitate the provision of sound advice. They sit in an ideal position to make such advice available for their employees, but there are fears many are simply adopting “the ostrich approach” and avoiding the issue altogether.
“There is a palpable need for education, yet the same old familiar mistakes which were present prior to Pension Freedom are being repeated now,” warned Lee Coles of Jelf recently, in an article featured by the Actuarial Post. Employers are in the best place to help support employees in taking financial decisions with major implications, he says.
Often, education is around an attempt to sell a new service, and so while it gets provided free – which appears attractive – it will be biased towards promoting a particular new savings plan or something similar. Alternatively, a broad based advice programme really helps no one specifically.
What is the best approach? Coles recommends financial planning workshops for staff, individual clinics for a more personal look at the options, and dedicated workshops for those in their final years of work before retirement.
The key is to get clear advice before acting. They say ignorance is bliss, but with your pension it could also prove very expensive.