Who's responsible for your financial future? Individually we've all got to wake up to the fact that the Government will no longer bail us out. But most of us do need some guidance about how much to save, where to save, and when to cash in our retirement savings.
Companies have a huge role to play in this and, in fact, should do more to help people prepare for their financial future, Scottish Widows demanded this week. Research by the investment and insurance firm has found that many workers want their employers to provide practical financial education and guidance.
That raises a number of questions. Last week the Association of British Insurers revealed that pension savers withdrew £27m a day from their retirement savings in the first three months of the new pension freedoms, launched in April. In other words they grabbed back some £2.5bn of money that had been earmarked to give them an income in retirement.
My concerns remain that people are rushing to make the most of the freedoms without really considering the consequences. The ABI suggests that people are moving the cash to other options, such as income drawdown, but I bet there are some, often encouraged by dodgy advisers, who put it into highly dubious investments.
Others, I reckon, will simply spend the cash, which is fine if they know what they're doing. But it's likely that some will not really understand that they're leaving themselves with nothing to fall back on in later life.
More education is key to ensuring people make the right moves and I believe employers have a crucial role to play. Many people don't know where else to turn for guidance, but the workplace is exactly the right environment. I hope to hear of more firms arranging free independent financial advice for their staff.
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