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What is the ‘Mid-life MOT’, and can it help people plan for retirement?

For those still in work but approaching retirement age, it is important to evaluate how far they are from achieving the lifestyle they want in retirement. 

In 2019, the Department for Work and Pensions (DWP) launched an initiative known as the ‘Mid-life MOT’ to help middle-aged Britons better understand their financial situation, and the steps they could take to enjoy a financially secure retirement. 

The Mid-life MOT has moved further into the spotlight following this year’s Spring Budget, in which Chancellor Jeremy Hunt announced a significant expansion of the initiative to encourage older workers to stay in employment, making it more widely accessible to those approaching retirement via online access.

So, what exactly is the Government’s ‘Mid-life MOT’ initiative, and perhaps more importantly, is it for pension planners?

What is a Mid-life MOT? 

The Mid-life MOT is a free online review for workers in their 40s, 50s, and 60s, designed to help them take stock of their finances, skills, and health. It also provides access to educational resources and guidance in areas where weaknesses or gaps in knowledge are identified.

The scheme aims to encourage middle-aged Britons to take an active role in planning their retirement and considering their financial future, enabling them to better prepare and build financial resilience against future challenges. 

Mid-life MOTs are being delivered online with the support of private sector providers, while eligible benefit claimants can access a face-to-face MOT through the DWP’s network of job centres.

Will the Mid-life MOT be useful to pension planners?

To a certain extent, the Mid-life MOT will be a useful tool for pension planners. Indeed, its expansion marks a step in the right direction from the Government regarding supporting Britons’ retirement goals. 

Many people underestimate what is required for a comfortable retirement, so it is essential that savers engage with their pension planning as much as possible. Similarly, people using online support from credible, verified sources to educate themselves on different types of pensions, investments, and retirement strategies should certainly be encouraged. 

However, this should only be the beginning. To help Britons fully engage with their pension, action must be taken by the Government to make independent financial advice widely available and accessible.

Until such action is taken, pension planners looking to weigh up their options for retirement would be wise to seek the advice of an accredited independent financial advisor (IFA) to help them fully evaluate their pension savings.

Unlike the online guidance offered through the Mid-life MOT, an IFA can provide support beyond generalist pension information. Advisers, such as a member of My Pension Expert’s IFA team, can assess an individual’s personal situation, as well as their future goals, and develop a tailored strategy to suit to help them achieve the lifestyle they want in retirement. 

Ultimately, while the Mid-life MOT may be a helpful first port-of-call for pension planners to gain an aerial view of their financial situation, it should be viewed as a starting point in one’s retirement journey – it is by no means a substitute for independent financial advice. So, before making any definitive decision regarding retirement finances, it is vital that individuals speak to a qualified, regulated adviser. In doing so, they can remain confident that they are making an informed financial decision, which suits their needs and circumstances.