The act also protects the new pension freedoms and flexibilities, so people have control of their pension pots, and know it is a criminal offence for scammers to pretend to offer official Pension Wise guidance.” The landmark legislation will create the opportunity for workers to save into plans – known as Defined Ambition – which will offer them a promise about some of the benefits they will receive. Currently, a growing majority of workers who have a pension pay into Defined Contribution schemes which, while offering many advantages, do not give any guarantees of eventual income. The Pension Schemes Act will also enable new collective pensions to operate in the UK. Schemes offering collective benefits will be able to pool risks between the members and this can provide greater stability and already operate successfully in other European countries. These reforms come into effect shortly before ground-breaking new pension freedoms which are due to take effect in April. The Pension Schemes Act also provides further protection measures for pension savers taking advantage of new flexibilities to access their pension pots from this April, including important new legislation on the new guidance service, Pension Wise . According to research from Prudential , women retiring this year expect a retirement income 25 per cent lower than men; however the retirement income gender gap is now at its narrowest since 2009. The insurer's annual 'Class of' research, which tracks the future financial plans and aspirations of people planning to retire in the year ahead, is now into its eighth year and has highlighted a retirement income gender gap of £4,800 for the 'Class of 2015'. Women planning to retire this year have, on average, an expected retirement income of £14,300 compared with £19,100 for men. However, the good news is that the gender gap is shrinking and is now at its narrowest since 2009 when Prudential first started tracking the difference between male and female retirement income expectations as part of its 'Class of' research. This year's female retirees have the highest average expected annual retirement income ever recorded by Prudential's research, and expect to be nearly 17 per cent better off than those who planned to retire last year. In contrast men's expected retirement income expectations have increased by just one per cent since last year. The rise in women's expected incomes is reflected in their increasing optimism about retirement - more than two-fifths of women (44 per cent) believe their pension will provide for a comfortable retirement compared with just 29 per cent in 2014. Meanwhile, 50 per cent of women feel financially well-prepared for retirement compared with just 41 per cent in 2014. Workplace Savings & Benefits has written an interesting article on What employers need to know about implementing the pension freedoms. Retirement income gender gap is shrinking 9 March 2015
Vince Smith-Hughes, a retirement income expert at Prudential, said:
"The new rules on how people can take retirement income from April this year and the planned changes to the State Pension that will come into force next year have clearly
CIPP Policy News Journal
08/04/2015, Page 429 of 521
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