Providing additional support for employees.

24th May 2017

Jonathan Watts-Lay, Director, WEALTH at work, a leading provider of financial education, guidance and advice in the workplace discusses the impact the pension changes with Professional Pensions.

Watt-Lay comments; “One of the things that we are finding is that people don’t really understand the full flexibilities of freedom and choice and how to optimise their income. The bit that most people have got is that it is their money and they can do whatever they want with it – they understand the high level principle, which is great, but the devil is in the detail.”

He adds; “Most people retiring today probably have a mix of both defined benefit and defined contribution pension provision and may well have other savings as well-meaning they have to decide where they take income from first and how to do this in the most tax efficient way. On this he comments; “Right now, the problem is that employees tend not to know how to calibrate the taking of income from their various asset pots.”

Watts-Lay discusses the problem of basic rate taxpayers cashing in small pots all in one go – making them a higher rate taxpayer for that tax year and meaning they have to pay substantially more in tax than they need to. He comments; “It is issues like these which are leading to an increasing number of employers and trustees to implement financial education, at-retirement and advisory programmes of their own to help their members make better decisions.”

To read the full article in Professional Pensions, please click here.