With greater freedom comes greater responsibility

15th October 2014

In response to the Chancellors announcement on Tuesday giving pensioners even greater freedom, Jonathan Watts-Lay, Director, WEALTH at work, is concerned that proper financial education and advice is needed to prevent costly mistakes and the proposed free guidance is unlikely to be enough.

Jonathan Watts-Lay, Director, WEALTH at work, leading provider of financial education and advice in the workplace, comments; “Greater flexibility to decide how to take income from pension savings is fantastic news for savers; giving them the flexibility to do what they want to do, whether it be paying off their mortgage, giving money to grandchildren, or just ensuring they generate the income they need. However, experience has shown that when it comes to making what for many will be the largest financial decision of their life, with choice and flexibility comes potential confusion and poor decision making. We have provided financial education to over 70,000 employees and have found that without guidance and advice, people tend to not really understand their retirement situation, and vastly over estimate their likely retirement income. This ‘do what you want when you want’ regime for pension savers is good news, but proper financial education and advice is needed to prevent a huge mistake being made.”