Survey results reveal employers have still not adapted to pension changes.

29th January 2016

WEALTH at work, a leading provider of financial education in the workplace, supported by guidance and advice, conducted a survey amongst 94 employers to see if they had adapted to the pension changes. Jonathan Watts-Lay, Director, WEALTH at work explains the key findings.

Employees heading towards retirement income disaster?
When no glide path is selected by employees, 43% of employers will still default employees to an annuity tracked glide path. This is despite a significant fall in annuity purchase as a preferred option for employees.
An annuity tracked glide path might not be the most suitable option and it may leave many on an investment route which is not aligned to their retirement plans – potentially resulting in a reduced income in retirement.
Also, only 11% of employers believe their employees are saving enough for retirement. Employers can help by providing financial education and guidance around workplace benefits to help employees understand what savings can be achieved.

Employees unable to access the new pension flexibilities through their workplace
Over a quarter (26%) of employers do not allow their employees to take money from their pension (from age 55) whilst they are still working for them. This isn’t surprising as employers must be worried about the effects of pension depletion.
Additionally, results reveal that almost one third (32%) of employers do not provide access to the new pension flexibilities in their scheme at-retirement. The fear of employee pension depletion, coupled with the increased cost of administration or simply not having the infrastructure in place to provide full access, could explain why employers are not providing the new pension flexibilities.
Finally, the survey found that 40% of employers do not offer their employees financial education around the pension flexibilities at-retirement, which could leave employees vulnerable to making poor decisions.
But it’s not all bad news as there are providers like WEALTH at work who can deliver a full service, from financial education and guidance supported by regulated advice, to ensuring the appropriate service provision is available to implement all options at retirement.

All statistics quoted are from the WEALTH at work: Pension Changes Survey – Our Survey Results 2015. Please see here.
The research received 94 responses which were completed online and via paper over 3 months from August to October 2015.