The world of pensions has seen enormous change over recent years. Thanks to auto-enrolment, millions more are now saving for their retirement in a workplace pension scheme. And following the radical pension reforms announced by Chancellor George Osborne in the Budget 2014, savers now have more choice than ever before in how they access their defined contribution (DC) pension savings at retirement.
Research conducted by the PLSA in October 2015 tells us that around a third found the process of making a decision about how to access their DC retirement savings harder than expected. Respondents almost unanimously (99%) agreed they should be ultimately responsible for making the final decision about what to do with their DC pension savings, but about three-fifths still wanted support and guidance, and just under a fifth would choose their scheme or provider to help them make a decision.
A good-quality pension scheme can play an important part of both an organisation’s staff recruitment and retention strategy, and its transition management strategy. While auto-enrolment is doing a great job at nudging people into pension saving in the first place, employers can help communicate the options available at retirement to help complement the government’s guidance service, Pension Wise.
Engaging employees in pensions from a young age can give them the best possible chance to achieve a decent income in retirement. Speaking to older employers about pensions can help them make informed decisions about what to do with their savings as they approach retirement.
Jackie Wells is head of policy and research at the Pensions and Lifetime Savings Association (PLSA)
