The Government is to invest £5m in expanding its mid-life MOTs for people which include a review of financial affairs and retirement plans.
Minister for Pensions and Financial Inclusion Guy Opperman announced the move this week.
He said tens of thousands of Brits be able to use the MOTs to “take stock of their work, wellbeing and finances.”
The Mid-life MOTs provide a review for workers in their 40s and 50s to help them ‘take stock’ of their “finances, skills and health.” The Government says it will help people in middle-aged be better prepared for their retirement and help them build financial resilience.
The Mid-life MOTs will be provided online by the private sector and through the Department for Work and Pensions’ Jobcentres but an expansion to face-to-face advice is on the way.
Alongside the scheme a face-to-face Mid-life MOT programme will be trialled through employers with employees in three areas: the North East of England, Cornwall & Devon, and East Anglia. DWP will also be working in partnership with the Money and Pensions Service (MAPS) to develop an enhanced digital Mid-life MOT tool.
At Jobcentres staff will meet with older jobseekers to “examine their retirement planning” and help them to overcome barriers to employment and also explore ways of improving their earning and saving potential.
However concerns have already been expressed about whether the advice given by Jobcentre staff may constitute regulated advice.
Tom Selby, head of retirement policy at AJ Bell, said: “If mid-life MOTs can act as a spur to action, they could be hugely beneficial for those who receive them. They may also nudge people to consider taking regulated advice to better understand their retirement options.
“Getting clarity over the boundary between guidance and regulated advice will be absolutely critical if mid-life MOTs are to really take off in the private sector, however.
“As things stand many employers are hesitant to have conversations with employees about their finances for fear of stepping over the boundary. If this lack of clarity could be addressed then it would open the door to millions of savers getting better guidance on their finances, savings and investments.”
The DWP told Financial Planning Today that the Jobcentres will partner with local organisations to provide guidance on employment, skills and health, as well as finances but, “this will not constitute regulated financial advice.”
Minister for Pensions and Financial Inclusion Guy Opperman said: “The challenges we’ve faced over the last few years have highlighted the importance of financial resilience. As people live longer and healthier lives, planning for work, wealth and wellbeing in later life is vital.
“Our Mid-life MOT expansion will give people the tools they need to assess where they currently are and how they can get to where they want to be – whether it’s that next career move or ensuring they’re on track for the retirement they want.
“These new measures form part of a wider £22 million package to help over 50s find new careers and earn more money by boosting time with Work Coaches and bringing in specialist support.”
