Over half, 53 per cent, of pension schemes leave it to the point of retirement, or within a year, before first contacting members about their retirement options, new research has found.
Despite leaving it late, a survey by Lemonade Reward, of 60 companies with 3.6 million members, found that 90 per cent of schemes do provide support for members, but few rely on in-house tools.
Among the different options available, 60 per cent signpost pre-retirees to the government’s Pensions Wise portal, 48 per cent to the pension provider and 42 per cent to online adviser Unbiased. Only 42 per cent have an online portal or tool and 33 per cent refer to a financial adviser.
However, this support has not appeared to improvement members’ knowledge, as the survey found 83 per cent of members are unsure of or don’t understand pension freedoms and the same percentage have no idea when they can afford to retire.
Companies with schemes linking directly to Pension Wise and Unbiased said that 93 per cent of members are unsure of their retirement dates. In contrast, only 24 per cent of members who speak to an adviser have the same insecurities. Seventy-three per cent said a multi-faceted approach, using online advisory tools, seminars and financial advisers, is the best way to explain retirement options.
Commenting on the research, Lemonade Reward managing partner David Pugh said: “Organisations clearly want the best outcomes for members, but are struggling with the tools they’re using and their communication timing. Our research shows it’s important not to rely on a single information source for the answers and the sooner you open dialogue with members, the better they understand the options.”
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