When do you need guidance on your retirement?


Road Warning Sign. Retirement concept.Digitally generated 3d image.

Getting advice on your retirement is undisputedly a good idea but the timing of the guidance is up for debate, as is who should provide it.

In the Budget, chancellor George Osborne set out a plan for a 'guidance guarantee' that means every retiree will get some impartial guidance – not actual independent advice – on their options in retirement.

In reality the guidance is likely to be a whizz through of how long you could live and what will happen if you take all your money out of your pension and spending it all – spoiler, the answers are; a long time and poverty happens.

Of course I'm being blasé about it and actually knowing the basics about how long you have to make your pension last for and what you will and won't be able to buy if you fall back on the state pension is very important.

But when do we tell people these important facts? The idea at the moment is to do it when individuals retire but surely that's too late because if you're at the point of retirement then it's too late to do anything about the fact you may not have saved enough or that you really should have paid down the mortgage before picking up your pipe and slippers.

Plus, retirement is no longer just one moment in time anymore; it is a moveable point. Many people retire part-time through necessity or otherwise, some may retire and go back to work. Some don't retire when they thought they would.

It could be argued that you should start telling people about their retirement options 10 years before they plan to retire, because at least it will give them time to do something, whether saving more or paying down debt, to get a step closer to their ideal retirement. Others may find they can retire earlier.

The other big hurdle to Osborne's plan is who will deliver this guidance? It's going to be paid for by pensions providers but I would argue they're not the best channel to deliver it – something to do with vested interests and a poor track record when it comes to delivering good value and the right products to pensioners.

The guidance guarantee is long overdue, let's now make sure that it's not too little too late or a new way for poor pension products to be mis-sold to unwitting consumers.

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