East Ham MP Stephen Timms on free help on pension changes
- Credit: Archant
Last week, I met the local team from Pension Wise. It’s the government-backed advice service on the new flexibility being allowed in drawing down pension savings. In Newham, the service is provided by East End Citizens Advice Bureau.
Pension Wise told me that, since April, only 21 Newham residents have used the service. I am certain that far more people would have found the service useful!
Unfortunately, the government hasn’t given Pension Wise the publicity it needs, so many people approaching retirement don’t know about it.
Until April, anyone with a pension pot – and not part of an employer’s “defined benefit” pension scheme – had to convert it, by age 75, into an annuity. Annuities are sold by insurance companies.
The advantage of an annuity, and the reason the government required people to buy one, is that it guarantees an income each year until you die. The disadvantage is that the annual income often seems small after a lifetime of work. Many people have long felt they could do better if they had the money to invest, or even just to spend.
But, if you have a pension pot to draw on – and you can now access it from age 55 – it’s worth exercising care. Not surprisingly, there are crooks trying to persuade people to put their pension savings in bogus schemes which will end up worth nothing. Other, legitimate options can end up costing a lot in fees, or incur more tax.
If you are wondering how to draw down your pension, speak to Pension Wise. It’s a free service. Locally you can get hold of them on 020 8525 6360. An adviser will be glad to come to Newham to meet you face to face. Advice over the telephone is also available on the national number, 0300 330 1001. More from Stephen