- Job seekers in their 40s and 50s will receive extra support to save for retirement under an expansion of the Government’s ‘mid-life MOT’ plans (Mid-life MOT expansion to help tens of thousands assess work, wellbeing, and finances - GOV.UK (www.gov.uk))
- Jobcentre staff will help unemployed people by exploring ‘any avenues to help improve their earning and saving potential’, the Department for Work and Pensions says
- Retirement savings reviews will likely form a central part of face-to-face mid-life MOT trials to be conducted with employers and employees in the North-East of England, Cornwall & Devon, and East Anglia
- New measures form part of a wider £22 million package to help over 50s find new careers and earn more money
Tom Selby, head of retirement policy at AJ Bell, comments:
“The idea behind a ‘mid-life MOT’ is to provide people with a financial health check in their 40s and 50s, with the hope this will give them a better idea of what they need to do to achieve their goals.
“Pensions minister Guy Opperman has placed mid-life MOTs at the heart of plans to boost financial resilience among Brits. At this stage the idea is just being tested, although it is possible at some point in the future government will look to legislate to require firms to facilitate financial guidance sessions for staff.
“People in their 40s and 50s are at particular risk of having too little money saved for their later years, with many having missed out on the glory years of guaranteed defined benefit pensions and coming late to the automatic enrolment party.
“However, it is still possible to make up for lost time and the expansion of the Government’s mid-life MOT trials should help more people get a handle on their savings and investments.
“If mid-life MOTs can act as a spur to action, they could be hugely beneficial for those who receive them. They may also nudge people to consider taking regulated advice to better understand their retirement options.
“And while those looking for a job are more likely to be focused on the immediate priority of getting back into work, it makes sense to use the face-to-face interaction to get people thinking about their savings at the same time.
“Getting clarity over the boundary between guidance and regulated advice will be absolutely critical if mid-life MOTs are to really take off in the private sector, however.
"As things stand many employers are hesitant to have conversations with employees about their finances for fear of stepping over the boundary. If this lack of clarity could be addressed then it would open the door to millions of savers getting better guidance on their finances, savings and investments.”
