New ‘wake up’ packs to help over-50s with pensions

THE over-50s will start receiving ‘wake up’ packs this week in an official bid to get older workers thinking about how to fund retirement.

Regulator the Financial Conduct Authority has introduced the measure to open people’s eyes to pension planning rather than leaving matters until it is too late – such as when a pot is cashed in and then found to be insufficient. Previously packs were sent out shortly before retirement. Now middleaged people with personal and stakeholder pensions will receive the packs every five years from age 50 until the pot is empty.

Included will be a single page summary with key information such as name, provider, pension contribution amounts and value of the pot.

A factsheet from the impartial Money Advice Service and signposts to advice will also feature, along with details of charges and what annual income the pension pot could produce in future.

Ian Browne, pensions expert at advice and investment management company Quilter, says: ‘These packs are designed to be short and sweet so when they land on your doorstep the five pages will give you a snapshot of what your pension looks like.

‘It’s important you take a close look at them and think about when you plan to retire, how much more you might need to save for a comfortable retirement and whether you need to change your investments.’

Testing by Quilter shows there is good reason for people to wake up and take notice.

Its research found that consumers who read the packs went from a limited understanding of their pension to knowing that a personal pension did not give a set income; they could get guidance from the impartial Governmentbacked Pension Wise service; they could shop around for retirement income deals; and pension scams are prevalent.

Browne adds: ‘Retirement is no longer a cliff edge at the end of your working life. Phased retirement is becoming increasingly popular and pension freedoms allow flexibility for you to fund new experiences. A qualified financial planner can help you make the most of this exciting time of your life.’

Queries about pensions and retirement can also be directed to The Pensions Advisory Service, which is free and impartial, by calling 0800 011 3797 or at pensionsadvisoryservice. org.uk.