Money Marketing report that at the LibDem conference today, there has been a call for those over the age of 50 to be given a one hour consultation about their pension in relation to the new auto-enrolment pension scheme (NEST). It is reported that Lord Oakeshott is concerned about the prospect of yet another pension mis-selling scandal. He has tabled a motion in the House of Lords for all those over 50 to receive an hours consultation. It seems that he is primarily concerned about the best use of money when debt might be repaid or benefits lost if only small sums are going towards a pension.

Lord Oakeshott is of course quite right to be concerned that people use their money wisely, but the main point of NEST was to provide a low cost pension that required little advice and possibly set up by an employer (which includes sole traders). This is not good news for employers or advisers who technically could be caught out advising those on low incomes to save for their retirement, when in practice (and with the advantage of hindsight) it may have been better for such a person to spend their money or clear debt rather than save, if the benefit system means losing benefits which they may have otherwise qualified for. To my mind this merely highlights the mess that our benefit system is in. We should never be in the situation where taking responsibility for your future is penalised.

I would certainly agree that advice about whether to join a pension would be preferable, but precisely who provides this and whether the advice is any good is of course unclear. Attempting to assess a 50 year old’s existing pension planning to date and presumably debt levels, expenses and planned goals does not take an hour as any good financial adviser will know. Perhaps Lord Oakeshott has never met one.

Similarly, Dr Ros Altmann of Saga is concerned that certain people over the age of 50 should not be saving into a pension. She would like to see risk warnings for NEST, as she argues that it is not always appropriate for low paid workers to pay into a pension.

As I hope is clear, I agree with the notion that for some people saving into a pension is not a good idea, if the benefits system remains as it is. If advice is to be provided, qualified and competent advisers should be the ones providing this – which costs money, which is entirely counter-productive to the intention of NEST. If advice is going to be provided and paid for, there are far better alternatives for employers to offer their staff than NEST. It is about time that this matter was properly finalised before it turns into yet another white elephant. We only have a year to go before the first NEST schemes must launch.

If you are old enough to have gone to the cinema to see “The Time Machine” with Rod Taylor which was released in 1960, you are one of those that is being “warned”. A time machine would certainly be of use when it comes to investing, but given that I’m not Doctor Who and don’t know anyone that has the benefit of being a Timelord, though if I may presume – we all need some time M’Lord!

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