Rafferty comments following the publication of a new report from the Centre for the Study of Financial Innovation (CSFI) as part of its study ‘The Dependency Trap: are we fit enough to face the future?’ which has further underlined importance for consumers of the industry delivering the Pensions Dashboard.
The report states that raising the State Pension Age is not enough to address the challenges caused by an aging population and the UK Government should instead support an ‘active ageing’ environment, which would improve health and economic activity among those aged over 50, thereby reducing the dependency of older people drawing pensions on younger workers paying taxes.
It also supports the development of the Pensions Dashboard and recommends the provision of realistic guides, or bespoke calculators, which would combine contribution periods with various start and end ages, and different crystallisation points, to help those who are considering whether to add to their pension savings.
Commenting on the report, Rafferty says: “This insightful study shows how the growing importance of economic productivity beyond the age of 50 is beneficial on a number of fronts and, in particular, for helping people save for their retirement.
“However, uncertainty about the eventual size of one’s retirement pot, which could be made of several pots, was cited as an urgent problem that could be resolved through the delivery of the Pensions Dashboard.
“As well as the potential ‘dependency trap’ that we may enter in later life, there is now a growing dependency on our financial services industry to advise, provide product plans and then action those plans.
“The Pensions Dashboard could bring together details of every retirement plan a person holds in one, accessible and simple screen so that they can be fully aware of the provisions they have now. And this could be just the first step in helping our population prepare for, and understand the costs of, retirement.
“The next logical step beyond the basic Dashboard is the creation of tools and calculators to help the consumer determine their projected retirement sum, so, where necessary, they can take appropriate action and/or advice to better fund their retirement years.
However, it is important that we first get the basics right for consumers, so we lay the firm foundations on which other services may be developed.
“With the DWP running its feasibility study for the Pensions Dashboards Project, our hope is that the project continues to move forward, as I believe it really is just the start in helping consumers be aware of their choices and so better prepared for their future lives.”
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