Citizens Advice offers pension help

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Published: Saturday 18th October 2014 by The News Editor

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The Citizens Advice service will offer free guidance on the Government’s radical shake-up of pensions, George Osborne has announced.

The charity will give face-to-face advice at Citizens Advice bureaux across the UK about the plans, which will allow people far greater flexibility in accessing the money in their pension pots.

Free and impartial guidance will also be available over the telephone from The Pensions Advisory Service (TPAS).

Under the reforms people aged over 55 will be able to take their pension pot subject to their marginal rate of income tax in that year, rather than the current situation where they are charged 55% tax if they withdraw the whole pot.

They will also be able to use their pension pot like a bank account and withdraw a series of lump sums, with 25% of each slice being tax-free.

Previously, people approaching retirement have felt forced to use their pension savings to buy an annuity, which provides a guaranteed yearly payout and ensures that that person will not outlive their savings.

But annuities, which are usually a one-off, irreversible decision, have been controversial in recent years due to falling rates and people not always choosing the best deal for their circumstances.

The Government has stressed that the reforms first outlined in the Budget would give people responsibility for their nest eggs, but critics have said they could lead to people squandering their savings.

The Chancellor said: “Giving people the freedom to manage their own pension is the backbone of this Government’s radical pension reforms and key to our long-term economic plan.

“That’s why I’m delighted that respected and impartial consumer advice organisations – Citizens Advice and The Pensions Advisory Service – will be offering free face-to-face and telephone guidance to people across the country from April, as promised in the Budget.

“These organisations have years of experience dealing with a variety of consumer issues and are well placed to be accessible to everyone who reaches pension age and feels they would benefit from the guidance.”

The face-to-face help will be given by Citizens Advice in England and Wales, Citizens Advice Scotland and Citizens Advice Northern Ireland.

Pensions expert Ros Altmann CBE said: “It is clear that, currently, most people saving for a pension don’t understand all the vital issues, and it’s really important that they receive impartial help to make the best decisions for themselves.

“Both The Pensions Advisory Service and Citizens Advice have long-standing experience in helping the public with financial issues; and it is really important that people do trust the scheme, otherwise they remain at risk of stumbling into poor decisions.”

Citizens Advice chief executive Gillian Guy said: “The right guidance can be the key to a financially stable retirement. People who have diligently saved year after year towards their retirement deserve to choose how to make the most of their pension pot and good guidance is central to helping people make the right decisions for them.

“As a trusted, independent charity, Citizens Advice is in a unique position to deliver face-to-face pensions guidance. We have 75 years’ experience working at the heart of communities, helping people get to grips with their finances. It’s a natural fit for us to help people understand their pension options and make choices for their future.”

TPAS chief executive Michelle Cracknell said: ” We believe that it is essential that the guidance is delivered by specialists that have the experience and knowledge to respond to how people feel about this subject and get them to engage. Once we talk to people about their lives and their priorities, our experience is that we can get people to feel more confident about what they need to do next.”

Published: Saturday 18th October 2014 by The News Editor

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