DWP to introduce financial ‘MOT’
Guy Opperman, minister for pensions and financial inclusion, says the Department for Work and Pensions is pioneering a new ‘mid-life MOT’, which would introduce a financial stock-take for older workers.
Writing in The Times, Opperman said the financial health check would enable people to make informed choices around retirement and their pension.
It will be delivered through a new Single Financial Guidance Body, which is designed to focus on those who are most in need. Opperman said he wanted to make it easier for consumers to access free and impartial information and guidance to help them make effective financial decisions.
Steven Cameron, pensions director at Aegon said the new measures could help people ‘stay safe’ at a crucial point in their financial life: “The government’s proposed mid-life MOT could be a powerful way of making it ‘the norm’ to check up on your financial future. Many people do seek advice or other support as retirement approaches to make the most of their pension saving, but for some this may come too late to enjoy the retirement they aspire to.
“The mid-life MOT should be timed at an age when people are starting to think seriously about their retirement, but importantly not too late to get on track. A check point around age 45 could help people be better prepared for their journey towards retirement. And if the MOT does uncover any financial issues that need exploring further, it’s important people have access to professional advice to ‘get back on the road’ to a financially safe future.”
The ‘mid-life MOT’ idea originally came from John Cridland, former head of the Confederation of British Industry (CBI) as part of the independent review of the State Pension which was published last year.