Maps urged to create checklist for pension 'dippers'

Maps urged to create checklist for pension 'dippers'

The Money and Pensions Service is facing calls to create a later-life checklist for people over the age of 50 who may be considering dipping into their pension as a result of the coronavirus crisis.

An independent report published today (October 15) also suggested the checklist, which would focus on workers facing redundancy amid the pandemic, should be made available via pension providers and employers. 

The 39-page Building the UK’s financial wellbeing in the light of Covid-19 report featured 13 proposals from 145 industry players, intended to improve financial wellbeing amid the pressures of the pandemic. 

The report warned over-50s were one of the groups hardest hit financially by the crisis, with 30 per cent between the ages of 50 and 60 predicting their financial circumstances would worsen over the next year.

With redundant workers in this demographic more likely to struggle finding employment in the current jobs market, the report said pension savings would need to last much longer than originally planned. 

In light of this the report called on Maps to "rapidly create" a later-life checklist for people aged 50 and over, with a focus on those who are thinking of dipping into their retirement savings because of the coronavirus crisis. 

It also suggested the Department for Work and Pensions should act to raise awareness of the checklist and the financial options available to the demographic.  

The Maps provided publishing support for the report, but its recommendations and editorial were independent of the service. 

Sir Hector Sants, chairman of Maps, said the service would respond in "due course to the challenging recommendations" made by the report.  

He said: "When, at the start of 2020, Maps invited 145 industry leaders to join the independent challenge groups to work towards the national goals of the UK strategy for financial wellbeing, we could not have anticipated the impact of Covid-19 on individuals, communities and the regions and nations of the UK as a whole.

"As it became clear how Covid-19 was affecting UK financial wellbeing, the Maps board acted quickly to ask the groups to pause their strategic work for Maps and use their extensive experience and knowledge to make recommendations on how the sector as a whole could respond to the immediate crisis."

The report said it hoped its recommendations could be "rapidly implemented" and would make a difference to people's lives by December 2021 or earlier. 

Last month research from the Institute for Fiscal Studies found one in eight older workers had changed their retirement plans due to the coronavirus, with a third now in a worse financial situation than before. 

In April it emerged anxious savers were trying to cash in their pensions more than 20 years before they were allowed to do so, as many fell victim to online scammers exploiting financial distress amid the pandemic.

The number of people looking to withdraw their pensions before the minimum age of 55 at online pension provider PensionBee had risen more than sixfold in just three months, from five in December to 31 in March.