Here's our weekly heads-up on the stories that may have caught your clients' attention over the weekend …
Rising retirement age means smart saving is more important than ever
Life expectancy may be on the rise and the government remains keen to push back the state retirement age further but two pieces of research highlighted by this Express article - which is subtitled "Who wants to work forever?" - suggests there are limits to Britain's "work until you drop" culture.
While a report by Aegon research suggests two in five of today's retirees are forced to stop working before reaching state pension age due to illness or redundancy, research by Just Retirement has found many women stop working to nurse a sick or elderly relative. The article also noted the facts the state pension age is set to reach 68 between 2044 and 2046 while just one in 10 people have any income protection cover in place.
The piece quotes Aegon director of pensions Steven Cameron urging the government to come to a permanent solution and adding: "If the Cridland Review comes to one conclusion, it should be to allow people to take their state pension from an earlier age, such as 60 - albeit in return for receiving a smaller pay-out."
For his part, Retirement Advantage pensions technical director Andrew Tully suggests workers start saving early, take advantage of company pension schemes and top up savings by shifting to part-time work in retirement. He adds: "Alternatively, claim tax relief on personal pension contributions or save into an ISA."
Weigh up well that bird in your hand
In his Sunday Times column this week, Ian Cowie discusses the pros and cons of withdrawing from "gold-plated" defined benefit (DB) schemes in favour of the defined contribution (DC) alternatives where savers can, he writes, "spend money as they like".
Observing that hundreds of millions of pounds are being withdrawn from traditional company retirement schemes to be transferred into "new-style" DC pensions, Cowie warns: "There is a loophole in consumer protection that could lead the unwary into being tempted to take cash now and repent in poverty later."
In an ornithologically themed piece, Cowie puts forward the "bird in the hand" argument - going on to caution his readers to consider what they might be giving up before taking what is likely to be an "irrevocable decision" to leave a DB pension scheme and possibly seeing their "goose cooked".
"In addition to an income for life, there may be other valuable benefits such as inflation-proofing, pensions for widows or widowers or other dependants, plus insurance against serious illness before retirement," he warns. "Additionally, some companies aim to cut the cost of pensions by switching from DB to DC schemes, where employees carry all the risk of investment returns disappointing."
New year resolutions for your money
In this little twist on the New Year's tradition, the Financial Times has asked its own money columnists as well as some well-known industry names and other experts to offer their investment and other financial resolutions for the year ahead.
Going beyond the typical ‘Save more, spend less' pacts, a longish cast list are setting out to stick to good intentions ranging from consolidating pension pots to actually spending more money to investing ‘less like a numpty'.
To highlight just three, in a similar vein to his 10 top tax tips for clients, Hargreaves Lansdown financial planner Danny Cox explains how he is looking to cut his own IHT bill, former pensions minster Ros Altmann discusses her intention to tackle her defined benefit pension pots while her successor and freshly knighted Royal London head of policy Steve Webb says his financial resolution for 2017 "can be summarised in four words - get a financial adviser".
Better late than never, Sir Steve.
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