Those who might have ideological objections to tax breaks of this kind should bear in mind that any strategy that fails to include incentivising those who are able to do more for themselves will not help those who cannot. Once again, it is a question of balance.
Closer to home, we in financial services have both responsibility and opportunity regarding this grand project. As a commercial sector, no one has more to lose. Equally, no one has more to gain. We need to play our part at every level, not least in creating value-for-money products that truly match consumer needs, complementing them with a variety of distribution media.
Nowhere is the opportunity greater than for intermediated distribution. The nation desperately needs what only we, at our best, can offer.
We have fretted for some time about attrition among intermediaries. This and the low amount of new, younger entrants has led to an adviser population with a high average age. Now, no one should see this seniority as anything other than an asset.
The Budget changes will place even greater emphasis on the need for advice ‘at retirement’. In addition, in future it will not just be a question of what to do at the point of ‘retirement’, but also about how best to manage the relevant assets through, on average, two or three decades when inflation will, undoubtedly, have its say. Those in this vast and affluent market will need constant help to retain adequate spending power at a time when, for them, personal finance will be more complex (with the consequences of getting it wrong more onerous) and thereby, more challenging.
We, in the intermediary community, are about to be in demand like never before.
Keith Carby is chief executive of Caerus Capital Group. The views expressed are his own.
Key points
There appears to be a paradox in the government’s relaxed approach to pensions and rigid rules over mortgages.
There needs to be a complete re-engineering of the approach to pensions and retirement
The government must provide taxation incentivises saving for life not just for retirement.
