The retirement revolution

23rd March 2015

Jonathan Watts-Lay, Director, WEALTH at work comments in HR Magazine on the new pension changes.

Jonathan Watts-Lay, believes the “massive fall off in annuity purchase” is significant. “All those people who could have retired but haven’t must be waiting for April,” he says. “There has been a constant flow of people retiring and now it’s fallen through the floor. The only logical explanation is that people are waiting.”

Furthermore, Watts-Lay worries there will be a “fundamental mismatch” between employers and employees, with people expecting to be able to take advantage of the new freedoms, and employers not yet set up to offer them. “We know through talking to employees that people think they can use their pensions like a bank account,” he says. “From a legislative perspective, they can, but not from a practical perspective as organisations aren’t going to let them. People are going to get frustrated.”

Watts-Lay continues; “Under the new rules, people can take the money and not retire,” “But employers are still paying for retirement. Generous contributions exist to manage the workforce out through retirement.”

Jonthan Watts-Lay comments on how it’s about employers and employees having a “shared objective” – to be able to retire at a suitable time and have the income to be comfortable. “The question is: How are you going to help your employees get to that point?” he says. “If you don’t explain that shared objective, you won’t make it.”

To read the full article please click here.