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Osborne: 'Free and impartial advice' over pensions

Chancellor George Osborne has said that "free and impartial advice" on pensions will be delivered by the Government using organisations like Citizen's Advice Bureau and Age UK.

Mr Osborne said the steps meant people could "make the right choices" and know that they are getting "good, independent guidance that is right for them".

Read: Pensioners to receive independent 'impartial' guidance

Money Advice Service welcomes pensions advice role

Planning for retirement is a crucial life stage, and it is important that people feel well-informed and confident in the decisions they make, the chief executive of the Money Advice Service (MAS) said. Caroline Rookes added:

The Money Advice Service welcomes the Treasury's announcement that we will have a role in the provision of the retirement guidance guarantee.

We are pleased to have this opportunity to build on our existing work helping people as they approach retirement and with wider money issues.

– Caroline Rookes, chief executive of Money Advice Service

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'Impartial' pensions guidance 'a real game-changer'

Millions of people will get free, impartial advice on how to make the most of their retirement savings under George Osborne's radical shake-up of the pension system. Pensions expert Ros Altmann, the Government's older workers' business champion, said:

The decision that guidance must be impartial and separate from the industry is a real game-changer and will help equip people to make the right decisions for them.

The challenge is now firmly with the industry to develop the products that people need, rather than simply the products they wish to sell.

– Ros Altmann, Pensions expert

Read: Govt to detail pensions overhaul with tax reforms

Govt to detail pensions overhaul with tax reforms

The government will publish new rules for the pensions industry giving retirees greater access to their savings and free financial advice, fleshing out reforms announced earlier this year that shook the share value of British insurers.

Chancellor of the Exchequer George Osborne.
Chancellor of the Exchequer George Osborne. Credit: PA

Chancellor George Osborne caught Britain's pensions industry by surprise in March when he scrapped a rule forcing people to buy an annuity, a financial product which converts a retiree's pension pot into a guaranteed retirement income.

"It's right to support hard working people that have taken the long-term decision to save for their future and I'm pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive," Mr Osborne said.

'Pooled' pension schemes unveiled in Queen's Speech

Plans for giant "pooled" pension schemes with the potential to boost people's chances of getting a better retirement outcome have been unveiled in the Queen's Speech.

"Collective schemes" that spread the risk between members could offer them greater stability over the eventual size of the pension they will end up with, while limiting costs to employers because of their economies of scale.

The Queen in the House of Lords for the State Opening of Parliament.
The Queen in the House of Lords for the State Opening of Parliament. Credit: Pool

Similar pooled schemes already exist in The Netherlands and a consultation into collective pensions had previously been launched by the Government.

The new type of pension would be a middle ground between the two types of scheme which currently exist - defined benefit and defined contribution schemes.

Ministers prepare Dutch-style 'collective pension' funds

Pensions minister Steve Webb has described collective pension schemes as "some of the best in the world", as radical reforms are expected to be addressed in the Queen's Speech this week.

Pensions minister Steve Webb Credit: PA

He told The Sunday Telegraph that the key advantage was "pooling risk" of investments performing less well than expected across large numbers of people of different ages, "just like car insurance or the NHS".

"It gives people greater certainty and probably better value," he said. "There are some quite strong claims made for how much better it is. People say, you will get a 30% bigger pension.

"You might, you might not, but clearly it is pretty unambiguous that you will get a more certain outcome and potentially a better one."

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Pension reforms to be addressed in Queen's Speech

A radical shake-up of workplace pensions is set to be unveiled in the Queen's Speech this week, with supporters saying retirement incomes could be boosted by thousands of pounds.

Pensions reforms to be addressed in Queen's Speech Credit: PA

For the first time, staff will be able to put their money into Dutch-style "collective pensions", shared with thousands of other members.

The so-called "mega funds" are regarded by many as a better investment because they are less vulnerable to variations in the stock market. The controversial changes, which could be introduced as early as 2016, are intended to deliver better value for pensioners.

Huge gaps in life expectancy revealed across UK

Female life expectancy (left) and male life expectancy (right) at age 65 in 2010-2012.
Female life expectancy (left) and male life expectancy (right) at age 65 in 2010-2012. Credit: ONS

Life expectancy remains much higher in areas of southern England than parts of the north and Scotland, new figures show.

Office for National Statistics (ONS) data indicates that life expectancy at birth for men in East Dorset is 82.9 years, while men in Glasgow are expected to live on average ten years less, to 72.6 years.

However, the gap between areas with the lowest life expectancy and those with the highest reduced between 2000-02 and 2010-12, the ONS said.

Read: Pensioners could be given 'death date'

Pensioners could be given death date estimate

Steve Webb said insurers could use a number of factors to make the estimates.
Steve Webb said insurers could use a number of factors to make the estimates. Credit: David Jones/PA Wire

Pensioners could be given an estimate of when they might die to help them manage their finances, according to ministers.

As part of Government guidance intended to help pensioners plan how much to spend and save, pensions minister Steve Webb said insurance companies could look at factors such as smoking, eating habits and socio-economic background when determining approximate life expectancy.

The guidance, which could be rolled out in April next year, may form part of a major shake-up of the pensions system.

The reforms also include measures to allow the withdrawal of money directly from a pension savings pot, without leaving them tied up in annuities.

Read: Pension reforms 'could leave older people at risk'

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