David Cutter: Need for guidance in pension minefield

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RISING life expectancy, changes in pensions legislation and uncertainty about future State provision – the outlook for future retirees is a far cry from the golden age experienced by the so-called “baby-boomers”.

Rather than looking forward to final salary pensions after lengthy careers with one employer, they face navigating a path through an ever-more complex retirement landscape in which, increasingly, they need to take charge of their own destiny.

In April, Chancellor George Osborne announced in his Budget changes to annuity rules which will allow future retirees greater flexibility over their pension arrangements. While a great opportunity, which promises to unlock this complex market and boost competition, it is also one example of the uncertainties and confusion for those trying to make their future arrangements.

According to the Office for National Statistics, 20 per cent of the UK population will be over the age of 65 by 2022, while growth in the overall population decelerates.

Add to this the fact that the fastest growing demographic is, arguably, the most in need of help, and you have the making of a social timebomb.

This is one of the biggest issues facing modern Britain and one of the greatest challenges for individuals,

How prepared are they for retirement? Have they saved enough? Will their pension give them a sufficient income? Can they even afford to retire? Or is it a case of carry on working until they drop?

At the same time, the amount of help and support that exists to help the average person answer such questions has dwindled dramatically.

Changes in financial advice regulation following the Retail Distribution Review have resulted in many providers withdrawing from the market altogether or restricting the help they offer to only the wealthiest clients, with £100,000+ being the new benchmark for accessing advice.

This is why Skipton Building Society has stepped in to help change the game. Founded as a mutual 161 years ago, Skipton is used to responding pragmatically to social problems.

Back then, it was the need to help ordinary people build their own homes at a time when the norm for most was unsanitary, rented back-to-back housing provided by industrial employers.

The issues have changed, but the desire to do something about them remains the same.

After listening to more than 2,600 customers and non-customers over the age of 50, Skipton Building Society has now stepped forward to help with a new free retirement review service, reflected in its new strapline: “Skipton – For Life Ahead”.

This follows 18 months of research which showed that people’s greatest need was help in dispelling the confusion they feel about retirement planning.

While they recognised the importance of life after work, many were also concerned about facing up to it and making sure they are sufficiently prepared to be able to live the life they want.

In fact, two in five of those the Society surveyed admitted to being underprepared as a result.

The solution Skipton Building Society is offering is both financial and friendly – two words that don’t often appear together in the same sentence. It can provide support with everything someone needs to plan a successful financial retirement.

And all of this is uniquely approachable and accessible for ordinary people, right on the High Street. The Society is urging people to open the conversation by sharing their aspirations for their lives ahead through a campaign focused on exploring their “writer’s block” around retirement planning.

The global financial crisis has tainted many people’s view of the financial services industry. However, this new offering is an example of the valuable part it can play when coupled with a social purpose and genuine desire to understand and answer real need.

David Cutter is chief executive of Skipton Building Society.