Money guidance

By Tom McPhail | 05 Aug, 2008 

How easy is it to plan for retirement? The government is continuing to redesign the UK’s pension system, with yet another Pensions Bill currently on its way through parliament (they are currently averaging one every couple of years).

One of the key aspects of the current Bill is the introduction of Personal Accounts (likely to be the pensions equivalent of a 1960s council flat, but better than nothing), and the automatic enrolment of millions of non-savers into a company pension scheme.

So I had the dubious pleasure of listening to spokesmen from all three major political parties recently, discussing the reforms and how to make them work.

One thing that they were all agreed upon was that it will be essential to give investors access to simple low cost information to help them with their pension planning. Originally this was called Generic Advice, but the phrase they seem to have settled on now is Money Guidance. This means that everyone should have access to simple guidance to help them decide what they should be doing with their money, and how they can save effectively for retirement.

Not everyone will need this help; for example, many Hargreaves Lansdown clients I have spoken to are highly financially literate already. Some people will want to pay for bespoke financial advice. Some people will welcome a gentle steer in the right direction.

What I think we are working towards is that there will be no excuse for not taking responsibility for your retirement planning. Who knows? It could even be fun.