There are still many savers who are disengaged with their pension planning and this has led The Work and Pensions Select Committee to recommend that every pension provider should have a default strategy at retirement.
However, this may not be in a members’ interests. If they do not take any action when they receive the providers’ Wake Up Pack, they may not be considering, for example:
- Money Purchase Annual Allowance.
- Means-tested Benefits.
- That they may have more than one pension pot so will not look at all pensions together.
- That they may pay more tax than necessary.
- That they may not consider that their income requirements will change throughout retirement.
It is therefore crucial to make sure that, as employees approach retirement, they take regulated advice, or at least make use of the support services available, such as Pension Wise.