The government is planning to introduce a pioneering financial MOT allowing people in their 40s to assess their finances in preparation for their final decades in work, according to pensions minister Guy Opperman.
The financial health check 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.
Cameron continued: “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 checkpoint 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 published in 2017.
Next year, the government is already backing the launch of a ‘pensions dashboard’ – an online portal that allows you to see all of your pensions in one place. People planning their retirement already get access to free guidance before they retire, through a service called ‘Pension Wise’.
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