— DWP (@DWP) March 9, 2019
This advert is untrue and misleading to the general public. Only a handful of people are benefiting from their saving into a workplace pensions, they are the ones who are able to spend their savings as they see best for them.
The vast majority of workplace savers are simply accumulating units in funds they know nothing about and have little idea how and when to sell.
I say this having read the results of research carried out by Saga and published yesterday. It tells us that savers have accessed over £3.2bn of their savings through pension freedoms without taking any financial advice
Saga’s study, which interviewed more than 2,000 adults, also found that only 20 per cent of people would consider taking advice when accessing their pension pot through pension freedoms, while 84 per cent still do not know what pension freedoms is.
The research also found that lack of awareness of pension freedoms grew among women, with 88 per cent unsure of what it is. Saga’s Jeff Bromage sees the Chancellor’s failure to address support for pension freedoms in his Spring Statement as an outrage.
“When pension freedom was first announced in 2015, the government initially promised that all over-55s with defined contribution pension pots would be eligible for free pension advice through its Pension Wise service. This promise was later diluted to the Pension Wise service providing ‘guidance’,”
“With financial advice deemed too expensive for many, we have seen a startling number of retirees simply accessing their pensions pots without seeking advice.”
Millions are saving but few know how to spend their money
It does not make sense to tell people they are benefiting from saving into workplace pensions when they cannot see the benefit.
It does make sense to sell the benefits of saving into a workplace pension by providing proper information to savers about what they are doing and what they could do in the future.
But Government has put its trust in the newly renamed Money and Pensions Service but it’s hard to see how Government agencies are going to turn this situation round.
What is needed is proper information about our money available to us at no expense delivered in a way that suits us
People need to be clear about what their options are and they need to understand the implications of the decisions they take.
Urgent action required now
We cannot go on chirping about how many new savers we have unless we can help people to use their savings. Only £23.4bn has been withdrawn from pensions using these freedoms, that’s out of a potential £1tr + that sits in DC pots.
People are misusing the pension freedoms, but most people aren’t using them at all.
The driver for me to create AgeWage is to help people who are uncertain how to manage their pension pots, to get precisely the help the Government has failed to deliver through Pensions Wise.
Now is the time for the private sector to sort this out – watch this space.