Most UK defined benefit (DB) pension schemes are now offering modellers and advice at retirement, according to Aon’s Member Options and Support Survey 2024.

The survey found that over half (54 per cent) of schemes are targeting buyout as their long-term objective, with 65 per cent of these schemes planning to offer additional options and/or support to members as part of the journey to buyout.

Additionally, 30 per cent of schemes plan to communicate to members in bulk before the options and support change.

Meanwhile, for schemes that have already carried out a bulk annuity deal, over a quarter have retained member options or support after the transaction.

Commenting on the findings, Aon partner and head of member options and support, Kelly Hurren, said in some cases, if the scheme is expecting a “significant” proportion of their non-pensioner population to retire in the short- to medium-term, they are choosing to run-on for a period of time.

The survey also found that over a third of schemes offer additional support to members through online modellers and/or independent financial advisers (IFAs).

This year’s survey, following the improvements in funding levels and increased discussion on endgame planning, includes insight from six bulk annuity insurers in the UK.

In terms of IFA advice, one insurer is making IFA advice available to all annuitants, while two insurers are actively looking at their offering and the other three are not proactively looking but would consider continuing with an existing IFA for larger schemes.

“Historically, bulk annuity insurers have not provided IFA support or additional options after buyout but that’s changing,” Hurren commented. 

“It’s great that insurers are recognising their responsibilities to members and adopting similar approaches to those followed by schemes.

“But it is still early days and to continue driving this change we believe that trustees and sponsors should be engaging with insurers at an early stage to signal the importance they place on addressing the underserved members and giving them the best possible support.”

The survey also found that most insurers are planning or already have some digital capabilities for member self-service.

Hurren said that this year’s survey brought “encouraging” news of the increasing trend of UK pension schemes providing more information and better support to their members at retirement.

“It is a trend that has increased steadily over the seven years we have conducted our survey and one I expect to continue,” she added.

“This means that members are better informed at a key time in their own personal financial planning.”

The survey also found that 30 per cent of schemes offer a Pension Increase Exchange (PIE) and/or Bridging Pension Option (BPO) to members at retirement.

Indeed, 50 per cent of insurers said they would consider making additional options (such as BPO) at retirement available for a scheme of any size.

“As well as a rising number of schemes providing members with access to education and support, we are also seeing an increased trend for providing flexibility in how members can take their benefits at retirement,” Hurren added.

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