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Retirement planning advice could reduce pensioner poverty

31 July 2009 / by Rebecca Sargent

The level of pensioner poverty is still unacceptable, the Government's Pensions Commission has claimed, but better financial advice could make a difference.

The Work and Pensions Committee released their 'Tackling Pensioner Poverty' report yesterday, which revealed that there are still two million pensioners living in poverty in the UK.

The report looks at what the Government could do to lift pensioners out of poverty, and while making pensioner benefits clearer and easier to access would go some way towards this, the Commission believes that better pension advice "could have a considerable impact on the lives of individual pensioners and would impact on pensioner poverty overall."

So far, the Pensions Committee has been working on a project called Money Plan, where independent financial advisers do pro bono work in the Citizens Advice Bureau (CAB). The Committee believes that evaluation of this project will reveal the need for further retirement advice, "We think there is a big gap in the market there," the Committee said.

Other measures the Committee looked at included the abolition of the default retirement age, which should allow pensioners to continue working past 65.

Commenting on the report, Emma Soames, editor at large for Saga Magazine said: "Unfortunately there is no quick fix for tackling pensioner poverty. It is going to become an increasingly critical issue as the number of those reaching pensionable age in the UK increases.

"We believe that the default retirement age should be abolished and healthy older people should be able to choose when they are ready for retirement rather than forcing them into it when they are neither ready for it financially, or emotionally."

Meanwhile, as interest rates remain at record lows, the Government should introduce further savings initiatives, Ms Soames claims: "We believe the Government needs to further incentivise people to continue to save for retirement as well as provide tax breaks for those that are trying to supplement their retirement income by living on the interest from savings."

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