61% of employers offer no guidance to those approaching pension freedoms

Six out of ten (61 per cent) employers do not offer their staff any guidance on accessing their retirement savings as they approach age 55, Punter Southall Aspire (PSA) has found.

The financial planning firm’s Financial Wellbeing 2020 survey, which received responses from more than 300 employers, found that just over half (51 per cent) of respondents offered some sort of financial education, support or wellbeing assistance to their employees.

PSA managing director, retirement services, Peter Selby, said: “The 55s are a forgotten generation when it comes to financial education, support or guidance as companies tend to focus on younger colleagues.

“This is a critical time for this age group as they can start taking money out of their pension, but there are pitfalls – such as paying too much tax, or withdrawing too much and depleting their pension savings too quickly – if they do it without guidance or regulated advice.”

When asked what financial guidance, support or advice they thought would be most helpful to their employees, retirement planning advice was the most common answer, closely followed by debt management and savings advice.

However, just 29 per cent of employers said they had a good idea of what they could do to help employees’ financial wellbeing, while 46 per cent had some idea, 21 per cent did not know where to start and 5 per cent thought it was not their responsibility.

Overall, the respondents thought individuals, government agencies and other organisations had more responsibility than employers for educating and engaging with employees over financial matters such as retirement planning, mortgages, savings and insurance.

Selby continued: “We’ve found concerns over cost or regulation are worrying employers considering financial guidance, but the right adviser can confront these worries, offering value for money and achieving positive outcomes that can help people make the most of their retirement and ensure they remain on the right side of increasingly complex regulation.

“Companies invest a great deal in supporting their people throughout their careers and it makes sense to do the same as they set out towards retirement.”

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