Retirement Pension Planner hits the rocks
Reality seems to finally be setting in with the Government guysí view of our recently simplified pension system.† Youíll probably remember that way back in 2002 the Department for Work and Pensions (DWP) started a project to build an internet-based retirement planner that was meant to give help to those without access to financial advice.† The idea was that everyone would eventually be able to get hold of up-to-date information regarding their state and private pension holdings online, including forecasts of future values.† It was also envisaged that the site would help people trace any missing occupational pension scheme entitlements and effectively become the main hub of knowledge about pensions for everyone in the UK.† Not only that, but the website was going to go on to help people not only take a holistic view of all their various different bits and pieces of retirement savings, but also to calculate any savings shortfall and provide illustrations of the options they would then have had to put things right.† A one-stop shop for pension advice and information really.† Somewhere where all the relevant pension information could be gathered together and presented in a simple-to-understand way that would be easy enough for people to not only understand, but to take action on.
Obviously putting that together was never going to be easy.† The different legislation and underlying form applying to the various and varied pensions one person could have accrued in an ever-changing state and private sector pension interface has always been getting towards the rocket-science end of the spectrum in my opinion.† Add to that the fact that the recent retrospective simplifications of the tax system have made what was mind-bogglingly complex in the first place even worse for Joe and Josephine Average, sort of makes a web-based one-stop pensions shop an absolute necessity I guess if people are to have a reasonable stab at doing things alone without proper advice.
A big project like this could never be brought off in one go.† The best way to deal with these things is to break them up into bite-sized chunks.† Even a journey of a thousand miles starts with one small step; that sort of thingÖ† And thatís the approach the Government people took with it back in 2002.† The first step in the journey was the easy bit really; putting up a site that would give people the full SP on their state pension entitlements earned to date and the likely projected benefits that would come from them. †That first step, as you may know, was completed in 2004 at the cost of around £11 million.
Last week, however, the Government announced that it has suspended its plans to develop the site further.† Not only that, but what has been built so far now comes with a health warning that the forecasts are based on current law, but the changes proposed to the state pension system may affect peoplesí entitlements.† So what is there isnít a hell of a lot of use to anyone as it may or may not be wrong before too long.† Or who knows?† Maybe it is right and the changes may not go through?† Or perhaps the changes that are proposed will be canned for other changes no-oneís even thought about yet?† Or maybe some changes will go through, but theyíll be subject to an as yet unanticipated U-Turn that will put things on a completely different footing?† And anyway, just because changes are in the air at the moment doesnít mean that those changes themselves, even if implemented as proposed, will not themselves be supplanted any day soon with yet other changes who knows how many times before we all get to retire?† And thatís the point really.† No-one knows where they are any more with this pension stuff because itís forever changing and probably always will.† Itís the rate of change thatís moved up another gear recently, thatís all; constant change is what pensions have always been all about.† Those lucky enough to have access to clued-up financial advisers are probably the only ones who can have any real confidence about their pensions any more I should think, but thatís another issue.
This is something weíve all known for some time, of course, but it seems more self-evident to me with every twist and turn of this continual change that is being wrought on our erstwhile complex, but useable, pension system; pensions without advice are just not sensible.† They never were, but the speed of change now makes it positively dangerous for people to try to go it alone without advice in my view.
It may not just be me that thinks that way though.† The Minister for Pensions Reform, James Purnell explained why the work on the DWP site had been stopped in its tracks when the DWP realised that ďdelivering accurate online information about state pensions would become increasingly difficult, given the uncertainty about the exact shape of future pension provision.Ē† Quite!
30 October 2006
Source:†† BBC News website 26 October 2006 - Government drops pension planner.
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