Pensions are a crucial element in financial planning and deserve the utmost attention and care. This is made even more prevalent in times like this where heightened emotions could lead to hasty actions.
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In a combined effort, the Pensions Regulator (TPR), the Financial Conduct Authority (FCA) and the Money and Pensions Service (MaPS) all came together to provide clarity for the current situation.
Recently, the MaPS urged savers to take their time and visit free impartial advisory services before making any decisions for their retirement savings.
On top of this, they highlight that fraudsters are likely to take advantage of the situation but all three of the organisations have committed to work together to tackle any additional risks.
Charles Counsell, the Chief Executive of TPR commented on how secure pensions are overall: “Pensions remain a safe long-term investment for your retirement and it’s important to avoid hasty decisions about cash that’s taken a lifetime to build.
“We urge you not to transfer your pension into another arrangement now and regret the decision later. If you’re worried about your pension savings, take the time to understand what options you have available. There is no need to rush.”
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“For those who have a final salary pension, staying in your existing scheme is still likely to be the best long-term arrangement.
“All savers should be very cautious about making changes at this time.”
While impartial advice will be helpful, some people may feel that more direct action is warranted.
The government have proven capable of providing robust action with the recent “holiday” announcements.
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So far mortgage obligations, rent bills and even benefit repayments have all been offered three month breaks under Rishi Sunaks measures.
However, pensions have so far received little state support.
This is profound considering that the government has heavily encouraged pension engagement in recent years by promoting auto-enrolment.
The recent Family Resources Survey highlighted that the campaign has been working as Ian Brown, a retirement expert at Quilter noted: “Figures from the Family Resource Survey continue the good news story of auto-enrolment revealing that pension participation has jumped from 49 percent in 2012/13 to 71 percent in 2017/18.”
While this is good news, Ian goes on to detail that these new and improved pensions need some reform in the current circumstances: “However, auto-enrolment is facing a challenge few people could have predicted.
“Should employees and employers be granted a pension holiday during a time of financial instability, such as the current pandemic?
“It would seem to make a great deal of sense for employees placed on ‘furlough’ to be granted this reprieve when claiming on the government’s Coronavirus job retention scheme.
“Long-term saving is crucial and requires ongoing regular participation, but we are in unusual times and the onus is on the government to consider where pensions fit into it.”
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