A pilot program offering a financial "MOT test" for individuals in their mid-70s has been launched by Age UK and financial services firm Aviva. The initiative aims to assess whether retirement savings will suffice and if finances are otherwise in good order for later life.
This program is described as the first of its kind and covers a range of topics including pensions, housing, inheritance, scams, household budgets, benefits, and care needs. The developers hope their pilot will serve as a model for a potential government-backed version in the future. The government currently offers a "midlife MOT" for younger individuals, and the consumer website MoneyHelper provides similar resources.
The Pilot Program
The 12-month pilot was developed in collaboration with Age UK staff in four locations: Norwich, York, Bristol, and Sheffield. Sessions involve a review of financial and overall well-being, combining telephone support with face-to-face meetings conducted in participants' homes or local Age UK offices. The MOTs are intended for individuals aged 72 to 76 who possess defined contribution pensions. These pensions are invested to provide income in retirement but carry financial market risks, unlike defined benefit pensions which are guaranteed.
Joint research by Aviva and Age UK last year indicated that many individuals in their mid-70s face complex financial decisions with limited support. This finding prompted the development of the mid-retirement MOT.
Addressing the Retirement Guidance Gap
Michele Golunska, managing director of wealth at Aviva, noted that support often diminishes after individuals stop working, leaving a gap in guidance during retirement years. She highlighted that with the projected doubling of individuals over 90 by 2050, timely interventions for those in retirement are increasingly necessary.
Paul Farmer, chief executive of Age UK, emphasized the critical timing of this initiative, given the growing reliance on defined contribution pensions. He stated that the lack of structured support at this life stage can leave many making significant financial decisions without understanding how long their money needs to last. He also pointed out that these challenges can occur alongside health issues.
Sample Assessment Questions
Aviva and Age UK have provided a sample of questions designed to prompt consideration of financial challenges. These include inquiries about knowledge of retirement income sources, preparedness for unexpected costs, recent financial reviews, planning for future care needs, establishing Power of Attorney, assessing the suitability of current housing for the next decade, awareness of potential benefits, and identifying key financial worries for the coming years.
The program offers resources for retired individuals facing financial difficulties or challenges with managing their finances as they age. Age UK provides a free, confidential advice line, and the government-backed MoneyHelper service is also available.