Majority of employers consider retirement planning crucial

2nd December 2014

Majority of employers consider retirement planning crucial but don’t know if they’ll cope with demand after the pension changes

New survey results conducted by WEALTH at work – leading providers of financial education, guidance and advice in the workplace have revealed that 88% of employers that responded consider professional retirement planning crucial for their employees.

Although this is encouraging, only 15% of those employers believe their employees are making sufficient retirement savings.  And only 23% believe that their employees are well equipped to understand what level of income they will get from their company scheme at retirement. It is concerning that, over half (51%) of employers that took part do not have, or don’t know if they will have the resources and systems in place to cope with demand after the pension changes come into force in April 2015.

Jonathan Watts-Lay, Director, WEALTH at work comments, “It’s good to see many employers now have retirement planning high on their agenda, although more needs to be done to encourage employees to maximise retirement savings, and companies may need to look at their options to ensure they can deliver in the new world”.

“The pension changes coming into force from next April will bring greater flexibility for savers to decide how to take income from pension savings. This is fantastic news for those planning retirement, but without the right financial education, guidance and advice, employees could be left incredibly vulnerable to making poor decisions.”

Watts-Lay adds, “It is clear that there are three fundamental questions which employees may have as they approach retirement. Firstly, they may ask – what options do I have and what are the advantage and disadvantages of each? Secondly, what is right for me given my personal circumstances? And thirdly, how do I implement my chosen plan? These can be answered in turn by providing three easy steps – financial education, supported by advice and guidance and then ensuring appropriate service provision is available to implement all options whether that is an annuity, drawdown or simple cash withdrawal, or indeed a combination of options over time.”

“We are working with many companies to help ensure the three questions above can be answered in a meaningful way for employees. Whilst many providers are raising doubts about the ability to deliver to the new rules, it is not a view shared by us as the new rules are a very simple extension to the services WEALTH at work has successfully provided to many leading companies for many years.”

University of Lincoln provides a financial education programme for their employees. Phil Considine, Senior Lecturer at the University agrees, “Making provision for our financial future is a social responsibility that we must all accept.  Whilst employers must recognise the significance of their role of supporting the financial planning needs of employees, each individual needs the advice and guidance that allows these informed decision to be made”. WEALTH at work provides a retirement planning programme as part of University of Lincoln’s employee benefits. It aims to build a secure financial future in the years leading up to retirement for its employees.

Please see Personnel Today and Employee Benefits for further coverage.

Notes to editors:

All statistics quoted are from the WEALTH at work: Do your employees need to rethink retirement? Our survey results 2014.