The government’s ‘mid-life MOT’ website was launched earlier this year with very little fanfare, and yet it’s a good site which answers the three basic retirement questions:
When can I retire?
How much am I likely to have?
What should I be doing now?
The mid-life MOT section can be found within the wider website ‘get to know your pension’, and it provides pension tips for all ages from 20 to 60+.
The best bit about the website is that it provides a one-stop landing place with links to a wide variety of free and impartial guidance on anything from the State Pension to the National Careers Service, as well as The Pensions Advisory Service (TPAS) and Money Advice Service (MAS). This clearly recognises that retirement is about more than just money. Money is often the key driver of lifestyle in later life but it is important to recognise that health and changes to activity levels play an important part.
Sadly, the links to TPAS and MAS both state that they offer “advice”, which remains a point of contention. They should really be termed guidance and it would be ideal if the site included a ‘Find an Adviser’ service such as the one available from the Personal Finance Society, but perhaps this will come in time. This is important as it has been noted that people with no connections to a financial adviser find it very difficult to find and select one that they can feel confident in. Eventually also I would expect a link to the Money and Pensions Service-hosted pension dashboard.
While otherwise loving the content, I do have one quibble with the site in that some of the very useful information available is not immediately obvious. The landing page has six clear options which are, perhaps understandably, dominated by the State Pension.
These are useful but do not directly address the three questions above, which are covered but much less obviously, in the menu across the top of the page (see above).
The link to the under-appreciated MAS pension calculator is also very useful. The calculator does the essential job of linking the amounts saved to an eventual income target – something that is easy to overlook with defined contribution pensions. There are of course several proprietary versions available from pension providers but this one has the key advantage of impartiality.
My favourite section is however hidden under ‘having more for retirement’ which may mean that some users will not see it.
This section provides guidance which is targeted to specific age groups, which widens its appeal and emphasises that pension planning is a long-term project. It also highlights the fact that for most people additional savings are necessary to maintain pre-retirement living standards.
People in their twenties are encouraged to start saving early, highlighting the advantages of workplace savings. Those in their 30s receive additional guidance if they are self-employed or move jobs, whereas those in their 40s are urged to consider a mid-life MOT and to start thinking about how long their eventual retirement may last.
The mid-life MOT itself addresses finances, and also directs people to consider whether their current job is likely to remain suitable as they get older. Post-MOT users are encouraged to save more if they can and to make sure they can trace any older paid up plans before retiring. Pension freedoms are mentioned in the “60s” section, which is perhaps a little late, given that we know the majority of people cashing in their pension are in their mid-late 50s. Then for the retired there is information regarding support services. None of this is any way comprehensive but it is the right side of the line in terms of simplicity.
Through all of this the State Pension is very prominent. This is not surprising given that it lies within the government’s remit, but it is not inappropriate given that the State Pension is the bedrock of most people’s retirement. Being able to find out what you will get, and when, is extremely valuable to both savers and planners. The forecaster can also identify any National Insurance (NI) gaps and the tricky issue of child benefit and NI credits as well as how the projected pension can be increased by making voluntary contributions or delaying access.
Overall, I think the site should be welcomed by financial advisers and savers alike. It can be used to improve understanding of the basics of retirement planning and should mean that more people can generate sufficient savings to give them real choices when they come to retire, at which point full financial advice may be beneficial and cost effective.
Fiona Tait is technical director at Intelligent Pensions