The report, The pension / property paradox: moving beyond tunnel vision in retirement planning, highlights that pension pressures are set to rise as many people are accessing their savings early while generous final salary pensions face extinction by 2050.
This is what the report is putting forward:
The Money and Pensions Service should signpost retirees to consider home finance options and later life lending products as part of a joined-up retirement planning approach – promoted via a public information campaign.
This should include tailored guidance based on people’s life experiences and circumstances – recognising the impact of events such as divorce, separation and caring responsibilities on individuals’ retirement prospects.
The Department for Work and Pensions should build on the Pensions Dashboard initiative to facilitate a broader retirement dashboard that supports a holistic view of all assets and options.
The Financial Conduct Authority should continue to see how best to break down siloes within the regulatory framework, which create an increasingly artificial separation between specialist forms of advice and contribute to consumer safeguards in different areas of the later life market.
The industry needs to lead the way on this by building stronger referral pathways to break down these siloes. This will ensure consumers consider the full range of available products based on their current and future needs, whatever their entry point to retirement planning conversations.
The adviser community needs to come together to aid learning and the passing on of experience to meet growing consumer demand. This includes working with regulators and qualifications bodies to embed and promote minimum standards of knowledge across the entire retirement income and later life lending space.
Government should appoint a Minister for the Elderly, who can ensure broader social and financial issues are recognised and co-ordinated across all government departments.
A cross-party later life commission should be established to help meet the long-term needs of people in later life, including via the potential uses of property wealth and balancing intergenerational needs.
Responding to the report, Jonathan Barrett, partnerships director at digital retirement solutions fintech, Abaka, said: “Dashboards could go some way to helping consumers gain a greater understanding of pensions by providing a holistic overview of their retirement savings, while technology can also help them to understand other options such as equity release.
“Artificial intelligence (AI)-powered technologies, such as conversational chatbots and intelligent nudges, has the power to better engage customers with their savings and later life planning – it can help deliver digital guidance and advice to those who need it most, at a time when they need it most.
“Abaka is leading in this space, collaborating with financial institutions to help engage their customers and work to solve the later-life financial crisis.”
