26 Jul 2023

New Midlife MOT launched by the government

The money tool offers a personalised report to help keep your finances on track

The Department for Work and Pensions (DWP) has launched an online money Midlife MOT, provided as part of the MoneyHelper service.

It's a free-to-use online tool designed to assist older workers with their financial wellbeing from midlife through to retirement.

Which? takes a closer look at how it works and tests it out.

How does the Midlife MOT tool work?

You can access the Midlife MOT on the MoneyHelper website.

The financial MOT tool works as a series of questions about your lifestyle and finances.

There are 15 questions in total, starting off with general questions about yourself and your approach to bills and budgeting. Ownership of insurance, protection products, any savings, and a will are then queried.

The last section of the survey looks at pension provision and how you are planning for retirement, including your likely living arrangements when you stop working.

It takes about five minutes to complete the questionnaire. MoneyHelper says you don't need any documents or extra information to use the tool and anything you input will be kept completely anonymous.

The Midlife MOT then provides a personalised report that you can download. It's designed to help people understand what to prioritise to improve their financial position before retirement.

Alongside this financial help, there are links to other resources that address trying to get back to work and learn new skills, and the need to look after both your mental and physical health.

Who is the tool aimed at?

The financial MOT and other tools are part of a wider package of support for older workers. It was announced in the 2022 Spending Review.

MoneyHelper’s MOT is aimed at people between the ages of 45 and 65, and primarily those living and planning to retire in the UK. It should help to improve your finances and assess if your money affairs are on track.

The government has estimated that around 3.5 million people of pre-retirement age, a number which increased by 320,000 following the Covid-19 pandemic, are economically inactive and need incentives to stay or return to the workforce.

Find out more: how much will you need to retire?

The view of companies

There has been broad support for the DWP and MoneyHelper initiative from the financial services industry.

Jason Hollands, managing director at wealth management company Evelyn Partners, said: ’The Midlife MOT is recognition by the government that a vast number of the population are ill-prepared for their financial futures, with relatively few of the UK’s middle-aged workers having a clear picture of what sort of retirement their current level of savings – including cash deposits, ISAs and investments as well as pensions – is setting them up for.

'It is a reminder to everyone that it is worth taking stock of these things well before retirement is on the horizon in order to make important decisions – like when to retire, how much to save and whether to pay down the mortgage.’

Becky O’Connor, director of public affairs at PensionBee, added: ‘The idea of a Midlife MOT is great, offering people a fresh take on their work situation and new ideas and opportunities they might not have identified for themselves. The Money Helper financial tool, which helps people to make a financial plan towards retirement, is a worthy idea and a practical solution.’

Verdict on the money MOT

You receive a four-page summary with various pointers and signposts, which is a good starting point, particularly if you’re feeling a bit lost with your finances.

The personalised report contains links to other MoneyHelper content. It is split into three sections – ‘what to focus on’, ‘what to build on’ and ‘what to keep doing’ – with the segments populated according to your answers to the questionnaire.

For example, if you’ve indicated that you don’t have, say, a budget plan or a will, it will give you clear links on how to go about starting or setting these up under ‘what to focus on’.

Those already saving into a private pension are perceived to be ‘on the right track’ and are signposted towards further relevant content on the state pension, how to use your pension pot and making your money last in retirement, which are in the ‘what to build on’ part of the report.

Somebody in a more unprepared or precarious financial position gets a long list of suggested actions under ‘what to focus on’, including help with debt, potential access to benefits, the need for emergency savings and starting to at least think about retirement.

In a way, the financial MOT is a fairly basic prioritisation tool, with the pressing issues sorted from top to bottom. That said, a tailored checklist of things to consider is a helpful addition to existing guidance services.