The new Money and Pensions Service (MAPS) was launched on 8th April. Craig Rimmer, Policy Lead for Mastertrusts at the PLSA takes a closer look.
How do we get financial health to be taken as seriously as physical and mental health are today? This was the question that was asked by the new Money and Pensions Service (MAPS) at its launch event on Monday 8th April.
Research has shown that physical and mental health conditions are often interlinked with financial wellbeing. Sleep deprivation and general anxiety are two areas which are frequently connected to worries about debt and finances, for instance. Part of the process of tackling any problem is talking it through with someone else. Talking about money and pensions is a start to better financial wellbeing.
MAPS is born out of the merger of the Pensions Advisory Service, Money Advice Service and Pension Wise, and will keep the well-respected helplines, web-chatters and online tools that help people with their pensions today. It is able to act as a sounding board for money and pension worries and solutions.
The PLSA shares goals with the new guidance body in respect of key policy areas, effective member engagement, adequate contributions into pensions and better outcomes in retirement. We welcome that it is maintaining the midlife MOT for the self-employed and ambition to improve pensions saving among women.
In Hitting the Target, we called for MAPS to host the Pensions Dashboard and we are pleased that this will now be the case. A non-commercial Pensions Dashboard can set the standard for other commercial dashboards while guiding savers to getting more value from their pensions and higher retirement incomes.
The Dashboard will ensure savers know exactly what they have saved up in their pensions so far – enabling a start of a conversation about their future income. The next part involves savers knowing what they are trying to achieve in retirement. What sort of lifestyle do savers want to have? Do they want to be able to dine out once a week or enjoy the odd bottle of wine? Where do they want to go on holiday, in the UK, the Continent or further afield? How much money do they need to achieve this? Later this year the PLSA will set out figures corresponding to lifestyles they may want – informed by research with focus groups across the country. We believe this will help people to think about how much they might need to save over time for the type of retirement that would like to enjoy, and understand the future impact of their decisions about pension saving . It provides an alternative approach to replacement rates which are based on people’s current incomes – it focuses on the lifestyle people would like to have, and provides an approach that works for young people at the start of their careers, those self-employed with flexible incomes or generally with the changing pattern of economic activity and the job market.
We all have our part to play in making people more financially capable and the PLSA looks forward to working closely with MAPS in the future to achieve this. If we are all financially healthier, we are likely to have much healthier lives all round.