Covid-19 has caused significant disruption to all aspects of everyday life worldwide, including the way we work. Reduced hours, remote working, school closures, homeschooling, enforced holiday, furlough and, in some cases, even being laid off.
At this time of national crisis, pension trustees want savers in workplace schemes to be reassured that while, for many people, the pandemic will be a cause of heightened anxiety about their finances, for most, their pension need not be a reason to worry. Pension savings are well protected, carefully managed and sensibly diversified to be resilient to this kind of scenario. All pension schemes members that responded to a recent Pensions and Lifetime Savings Association (PLSA) survey, published April 2020, told us that they are confident of meeting pension payments through the crisis. That means for those who have already retired, pension income will not change.
If an employer has employees that are approaching retirement, however, it may advise them that they should take stock of their options before taking the plunge into life after work. For them, pandemic-induced falls in the stock market may mean now is not the best time to begin drawing a pension or to purchase an annuity.
If any employees close to retirement are unsure what to do, urge them to seek financial advice. Free pensions guidance is available over the phone from the Pensions Advisory Service and, for those who are over 50, have a workplace pension and want to make sense of their retirement options, impartial online or telephone appointments can also be booked for free with Pension Wise, a government scheme set up to provide specialist pension guidance.
The pensions industry is also warning everybody to be extra wary of scammers. Criminals will stop at nothing to try and illegally get their hands on pension savings and are even using global pandemic as an opportunity to con people. Be especially vigilant against this sort of activity in the coming months and advise employees, especially those approaching retirement, to never be rushed into making a decision about their pension.
Nigel Peaple is director of policy and research at Pensions and Lifetime Savings Association (PLSA).