Experts warn Government's new pension support plan is "too little, too late"

THE new pension support plan by the Government is “too little, too late” and “risks going nowhere”, financial experts have warned.

The Government will publish proposed draft legislation to support a new regime to give people the confidence to invest and make more informed decisions about their pensions, it was confirmed today.

But financial experts told Newspage that the plan could be on a hiding to nothing with many Brits having next to no understanding of their pensions.

They say they have seen “daily evidence that the public is confused about pensions”, so have called for more education in schools and workplaces.

Graham Wells, Founder and Financial Coach at GroWiser Financial Coaching said he feared it was “too little, too late”.

He saidL "The Government's proposed regime of 'targeted support' aims to make it easier for firms to provide more meaningful guidance, whilst stopping short of full, personalised financial advice. In theory, this should be a good thing because more support is needed for the 90% of the population who do not have a financial adviser. 

"But it's too little, too late. In my experience, knowledge of retirement planning and pensions is extremely low. It's really quite rare that I come across people who fully understand their pension provision. Even when people do understand what they've got, it can be hard for them to work out if it will be enough by the time they retire. 

“Targeted support should help nudge things in the right direction, providing it doesn't just become a sales channel for investment firms. Financial education in schools and the workplace, combined with the growth of financial coaching could help make a success of targeted support.”

Scott Gallacher, Director at Rowley Turton, warned that the support plan could be a damp squib.

He continued: “The Government’s new pension support plan is welcome in principle — but without regulatory reform, especially around FOS liability, it risks going nowhere. 

"Advisers see daily evidence that the public is confused about pensions, yet many firms avoid simplified advice because a single complaint could threaten the business. Unless this imbalance is tackled, we’ll keep talking about the advice gap instead of closing it.”

Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, said many people had no idea what to do with their pensions.

He continued: "Pensions are an alien subject to most people. Most pension providers assume a much greater level of knowledge than the average person has. 

“They need to simplify their documents as it puts people off. I want to see people engaging with their pensions and taking control of their future rather than throwing statements straight into the bin. These new proposals sound like a step in the right direction to help start those conversations.”