EXCLUSIVE: EB Summit: Staff need ‘reality check’ on need to save

Key communications to staff about retirement should relate to the expectations employees have about current savings and the most tax-efficient way to invest, according to Frances Corbett, educational development manager at the National Association of Pension Funds (NAPF).

Addressing delegates at the Employee Benefits Pensions and Workplace Savings Summit, Corbett said that employees needed a reality check about how much they would need to save to provide for their retirement.

For example, for a man retiring now at the age of 65, it will cost £210,000 to buy a pension of £10,000 a year.

“It is really important to get employees to think about what they expect from their savings,” said Corbett.
It is also important for employers to use really simple language when communicating pensions to staff, she said.

For example the phrase ‘pay less tax’ may be more effective than using the expression ‘tax relief’ in communications.

Corbett added: “If people could better understand their pensions, they would be able to make more informed decisions about them.”

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