Hunt’s `Work After 50′ Plan is A Golden Opportunity For Insurers

Will Jeremy Hunt’s plan to sweeten the eventual pension pot when workers retire aged 70 be enough to persuade millions to keep working until health problems inevitably affect our lives?

That’s the question insurers need to think about too, because the current policy of raising the State pension age gradually across most European nations offers an opportunity as non-public sector workers weigh up their options in later life. For those in the UK, working for the public sector usually means a generous pension aged 60 onwards, sometimes aged 55. But for those in the private sector, it’s a different, far more brutal story. Pensions are spartan, with poor lump sums and even worse monthly income projections.

So if insurers can offer some type of plan which offers a guaranteed income between say 55 and 70, to fill the gap before State pensions kick in, that could be a winner.

That is the gap which many people need to cover later in life, when living expenses are still high, but income may be reduced as employers choose to blank them due to age discrimination – yes, we know it’s illegal but just ask any recruitment specialist. For big insurers, there is perhaps a chance to offer a wraparound Life, Healthcare and Income plan to the market, which offers private medical, basic Life cover, plus an income top up of say 10K per year after aged 55. It would allow older people the option of going part-time, plus not rely on the NHS, and for many that would be a huge relief.

Meanwhile, here are some thoughts from My pension Expert;

Lily Megson, Policy Director of My Pension Expert, said: “Jeremy Hunt was thrown a hospital pass when he took over as Chancellor following Kwasi Kwarteng’s disastrous mini-Budget. But tomorrow is his chance to give much-needed detail about how he plans to rebuild a UK economy teetering on the brink of recession and, moreover, provide vital assurances to Britons who are trying to manage their finances and plan for the future amid such turbulence.

“For certain, ‘early retirees’ will come into Hunt’s crosshairs. For months now he has heralded his intention to get over-50s back into work in an effort to tackle economic inactivity, with those who retired during the first two years of the Covid pandemic a particular focus. Reports suggest that increasing the lifetime allowance and the £40,000 annual cap on tax-free contributions to pensions are among the Budget’s policy reforms that will support Hunt’s attempts to keep people working longer.

“However, while such changes would come as a boost to some, the underlying issue is that the Chancellor risks demonising those who do not want to work until their late 60s. Instead of trying to force retirees back into employment, the government ought to empower them to plan for the future they want and deserve. Namely, the Budget should include plans to ensure more people can access the information and advice they need to make informed decisions, putting them in control of their retirement plans.

“Skills bootcamps, ‘midlife MOTs’ and sickness benefits reform are also likely to feature in Hunt’s “back to work” Budget. Whether he gives the same amount of attention to those feeling pressured to delay or come out of retirement after decades of hard work and diligent saving due to soaring cost of living – only time will tell.”