Pension trustees have warned that scheme members are not prepared for the risks they may face in retirement, according to new research.
A survey conducted by the Pensions Management Institute (PMI) and Wealth at Work found that 88 per cent of trustees fear “predatory attention from scammers”, while 81 per cent of trustees are worried their members are not equipped to deal with tax issues.
Despite these concerns, of the 65 trustees questioned just 35 per cent provide financial education for members, while 61 per cent said their schemes do not provide one-to-one guidance for members at retirement. Just one in five provided or facilitated regulated advice.
Commenting on the findings Wealth at Work director, Jonathan Watts-Lay, said: “These findings indicate that pension scheme members coming up to retirement are likely to be ill-prepared and blissfully unaware of the potential problems ahead when accessing their pension.
“Unless more support is provided, it’s likely that many members will make poor decisions at-retirement.”
Furthermore, 85 per cent of trustees have concerns on the risk members face when transferring out of their defined benefit schemes, while 60 per cent were concerned about members’ savings lasting for their retirement and 63 per cent were worried about lack of member engagement.
“Our report suggests that all these concerns and risks could be mitigated by providing more support for members at-retirement which includes offering financial education, guidance and access to regulated advice, as well as helping members to implement their chosen retirement income option,” Watts-Lay added.
“An increasing number of Trustees are now turning to specialist retirement service providers to help their members navigate the maze of options at-retirement. This provides an efficient way for schemes to offer their members access to reputable providers who have undergone due diligence, rather than leaving them to go it alone.”
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