The Department for Work and Pensions has published a guide to help people understand more about pensions and saving for retirement.
‘Pensions: The basics - a guide from the government’ aims to cover topics such as what State pension is available, practical steps to help save for retirement and some of the financial choices which can be made to prepare for retirement.
According to James Purnell, minister for pensions reform, the 61-page leaflet is designed to help those people “not already in the know” to understand how pensions work.
Writing in his blog on the DWP website, Purnell highlighted the existence of the guide after admitting the complexity of pensions is one of the main barriers to saving as many people often don’t know where to start.
He adds: “If you want to find out the difference between a State Pension and an Occupational Pension or how to distinguish State Pension Age from Retirement Age this is the place to start. The guide contains answers to those vital questions about pension saving such as why? when? how? and how much?”
And according to Purnell the guide also highlights where people can go to get more help and advice, including the Financial Services Authority (FSA), Citizens Advice, The Pensions Advisory Service and IFAs, although it points out IFAs are the only one which will charge for advice.
The guide also points out on the first page that the information only relates to the current rules and warns the pension reforms proposed in the white paper could affect those people retiring after 6 April 2010 differently to the information stated in the guide.
It adds: “The government intends to bring forward legislation to introduce the plans as soon as Parliamentary time allows. Your future pension entitlement might be affected by the changes introduced through this legislation.”
Meanwhile, Purnell says: “As our white paper made clear, the complexity of pensions is one of the main barriers to saving. And our reforms are designed to help simplify things in the future. Meanwhile this guide is designed to help those people not already in the know understand how pensions work.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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