Many employees are reappraising their priorities and financial goals as a result of Covid-19, particularly with regard to retirement planning.
This is therefore providing a great opportunity for employers to engage with workforces by lending a helping hand from an educational and advisory perspective.
Research results released by the Office for National Statistics (ONS) this May show that 13% of workers aged over 50 say they have changed their retirement plans – 5% saying they will retire earlier and 8% planning to retire later.
Interestingly, those who have been working from home are more likely to say they are planning to retire later (11%) compared with those not working from home (5%). This could be because some of the benefits of homeworking — and the possibility of it continuing — have made the prospect of working to later ages seem more feasible.
But many other employees planning to retire later are motivated simply by concerns about having insufficient pensions savings.
Research results released by Standard Life Aberdeen (Abrdn) this April found that 66% of those retiring this year risk not having the pension assets to sustain their planned retirement income.
Although employees are taking a greater interest in their company pension schemes, many do not properly understand them and have little idea whether they are on track to receive a manageable level of pension income.
Employers, inundated with queries and concerns from scheme members, are frequently finding themselves unable to answer the questions or simply don’t have the manpower to deal with them.
But Chase de Vere is well placed to help. Unlike many of our competitors in the employee benefits space, we have an independent financial adviser (IFA) arm capable of providing a range of financial education services.
These can be tailored to fit in with the employer’s specific requirements and the audience being targeted, and they can embrace a wide range of financial topics.
When it comes to retirement planning, we can offer everything from generic seminars and workshops — which can explain the pension scheme to employees on behalf of the employer — to drop-in pension clinics providing one-to-one guidance.
The latter, which can be designed to last anything between 20 and 40 minutes, have proved particularly effective for answering specific questions from those who are unclear exactly what the levels of pension saving that they have been making to date will enable them to do regarding retirement.
In the majority of cases employees attending the clinics learn that they have funding shortfalls, and we are able to assist with helping them to plug the gap.
But that is certainly not always the case. For example, an employee who recently requested a one-to-one session with an adviser after attending a presentation was pleasantly surprised to learn that she was already in a position to enjoy a comfortable retirement – when she hadn’t been at all confident this would be the case!
Furthermore, these clinics are not only relevant to those just coming up to retirement. They can help even the very youngest of employees understand why they are paying pension contributions and, in some cases, help them appreciate that their employer is paying in more than it actually has to.
One employee in their 20s, when shown during a drop-in clinic what an additional £10 a week contribution would have compounded up to by his intended retirement date, memorably commented that he needed to make the increase not just now but by the same amount every year as it would make “a massive difference” to his lifestyle.
Whatever the age of the employee, the fact that their pension scheme is receiving an endorsement from an independent and objective source, rather than simply from the provider or employer, can be worth its weight in gold.
We can help employees to build a sense of ownership of their pension assets and to view their company as a caring employer – which can boost morale and productivity and help keep a lid on staff turnover.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.