Does your pensions calculator look like Ceefax? Why it’s time to upgrade
Online pension calculators: statistical or stochastic? My personal favourite is the “sarcastical”... Well, how much did you think saving £50 a month would provide in retirement?!
Displaying ‘funnels of outcome’ or ‘pits of despair’, add in a ‘turbo’ investment return button, and all of a sudden, your modest contribution input starts to look like enough for a holiday across the Caribbean Sea. However, in reality, your contribution probably means your trip is actually shaping up to be a day in Southend-on-Sea.
Do you believe modellers like these are really useful for you or your employees? No, nor me…
However, can you imagine your employees having the ability to learn, play and plan around their retirement, as well as understand their wider financial options (such as their debt or defining what exactly a LISA is?).
Can you imagine them having access to an engaging and product-free platform that respects them as a real person, using video, interactive touch tools and risk warnings tailored to their needs?
Can you imagine a smart digital platform accessible across an array of devices that can combine defined benefit, definied contribution and state benefits?
Sound good? Well, you just imagined Me2 Wealth powered by Barnett Waddingham.
Built by analytical actuaries but brought to life by our creative agency, DrumRoll, Me2 is like no other: it recognises we are all unique and have different needs. Me2 hands control to members, giving them levers to manage how much they can afford to save and for how long.
We recently surveyed 3,000 UK workers on their financial wellbeing. We discovered an incredible 43 per cent of respondents hope to retire before 65, yet the vast majority save nowhere near enough of their monthly salary they need to achieve this. Recent guidance has suggested employees should save a combined contribution figure of 16 per cent – but our research shows that only nine per cent save more than this. In fact, a quarter of all respondents had no idea what they were even contributing to their pension!
Me2 uses a unique identifier to ensure that your employee can model their specific scheme design – pressing a single button to benefit from the maximum employer contribution, increasing contributions slowly using auto-escalation (which we call “the power of one”) fixed over a term they are happy with – as well as looking at the impact of salary sacrifice.
Your employees can model their own outcome using the budget setting tool, or follow a set outcome based on current salary – flexibly moving retirement ages backwards or forwards in an instant to show how this impacts their potential income. All of this is then benchmarked against minimum retirement needs set by social policy research and development charity, the Joseph Rowntree Foundation.
Whether your employees are phasing into retirement or heading for a ‘cliff edge’ – Me2 ensures your employees are in control of pension freedoms, allowing them to visualise different options (such as cash, annuity or drawdown) all taken at the same time, or at different stages of retirement.
At all stages, members see age-appropriate messaging, communicated through channels suitable to them (such as encouraging them to “stay in”, or making sure they are paying enough in). Engaging videos provide messages pertinent to their needs – but for those who want to dig a lot deeper, a plethora of longevity and annuity tools are available to please even the most ardent of financial geeks.
But Me2 isn’t just for the member, it is also suited for the employer, or a trustee. It can track member behaviour and hold employer booklets and videos too. All information is compliant, and all data is secure – as you would expect from the leading pensions administrator.
Staggeringly only seven per cent of employees said they would turn to their employer for guidance (48 per cent said they favour finding financial guidance online). However, the beauty of Me2 is that the employer can help map out the whole digital journey for its members from prompts, nudges and even a swift kick (if required) around shortfalls, birthdays and significant events; all through one system which can be accessed through single sign-on.
Me2 Wealth is part of a wider world of digital tools under the Me2 banner, including flexible benefits and discount shopping, with further tools already under construction.
Through Me2, we aim to offer everything that the workforce of tomorrow needs today.
Author is Damian Stancombe, head of workplace health and wealth at Barnett Waddingham.
This article was provided by Barnett Waddingham.
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