Financial awareness: Do we need an NHS-style service for retirement?

Professional Pensions editor Helen Morrissey looks at how to increase financial awareness among the general public

I recently went to the launch of The Future Book, a research piece carried out by the Pensions Policy Institute in partnership with Columbia Threadneedle Investments.

The research gives a snapshot of the current defined contribution (DC) landscape and offers insight into how it may develop.

The good news is that we have seen a huge increase in the number of people saving for retirement via auto-enrolment. We can also expect the size of pension pots to grow markedly over the coming years.

However, despite this growth, the majority of people are still not sufficiently financially aware or saving anywhere near enough to give them a decent standard of living in retirement. There are also concerns that suboptimal retirement income decisions could also mean people miss out.

With many people either unable or unwilling to pay for independent financial advice and Pensions Wise currently limited to one 45 minute session, you have to wonder how people will fare. The Pensions Advisory Service’s chief executive Michelle Cracknell has called for the implementation of an NHS-type service for financial services.

She argues that we have to make financial services more accessible to people. Many people do not know where to go to get information, guidance or advice – they know they need help but don’t know where to get it.

I for one think Michelle is correct.

The provision of good-quality advice and guidance should not be the preserve of the lucky few.

By providing such a service, the fear factor should be taken out of financial decision-making over time.

We will see the development of more default courses of action that will become ingrained in people’s consciousness and we should hopefully see the results of better decision making.

As Michelle said, the provision of such a service is “critically important to the health of the country.”