The Department for Work and Pensions has launched its online midlife MOT.
The DWP's midlife MOT resource, launched this week, had originally been flagged in the Spring Budget when Chancellor Jeremy Hunt said he would be offering more support to older workers.
The government estimated 3.5m people of pre-retirement age, a number which increased by 320,000 following the Covid-19 pandemic, were economically inactive and needed incentives to stay or return to the workforce.
Jason Hollands, managing director at leading wealth management firm Evelyn Partners, said the midlife MOT was recognition that a vast number of the population were ill-prepared for their financial futures.
He said: "Relatively few of the UK’s middle-aged workers having a clear picture of what sort of retirement their current level of savings – including cash deposits, ISAs and investments as well as pensions – is setting them up for. It is a reminder to everyone that it is worth taking stock of these things well before retirement is on the horizon in order to make important decisions – like when to retire, how much to save and whether to pay down the mortgage."
Financial education
Hollands added that there were limits to what could be achieved with a one-off online MOT.
"We think much more needs to be done to help widen access to the educative financial support that so many people need and would benefit from. Professional financial advice is only taken by a modest proportion of the population, even though many people admit to a low level of confidence over managing investments and pensions. Much of the population is currently underserved by the financial advice sector but better use of technology has an important role to play in widening access to support and making it more affordable.
“It’s for this reason that we decided last year to provide free financial coaching – in virtual meetings with qualified professionals - through our consumer investing website Bestinvest, and we have seen this helping people make better financial plans and investment decisions with their ISAs and Self-Invested Personal Pensions.
And more recently we have launched Evelyn Partners moneyhealth, a financial wellbeing service that enables businesses and other organisations to help all their employees take control of their personal finances at no cost to the employee."
Pension and savings challenges faced by older workers
Becky O’Connor, director of public affairs at PensionBee, agreed that a one-off website may not be able to tackle some of the bigger problems preventing people from working in later life and building up their pension pots, including ageism in the workplace, lack of flexibility and part-time work and the need to care for dependents.
"As PensionBee highlighted in its recent report, The Carer’s Pension Gap, often the need to care arises in someone’s fifties, potentially forcing early retirement or a drop in hours on people who might otherwise be happy to continue working.
“In addition to using the Money Helper tool, people planning their finances in the later years of working life can try online calculators to work out what they need such as the PensionBee calculator."
