How to help make retirement a smooth landing for employees

Many people fail to plan early enough for life after work, simply because it’s hard to determine their future needs. That’s where employers can help

‘Taking back control’ is a catchphrase invented to encourage people to make active choices with the goal of achieving a better future.

Although it will forever be associated with Brexit, it can be applied to other parts of our lives, particularly those areas where people often feel that events are controlling them, rather than the other way around.

One example is retirement. People often struggle with understanding and planning for the end of their working life. Most employees know they are building a pension and how to check its value. The difficult bit is connecting that pot of money into a rich vision of quality of life in retirement.

Will I have enough money for a comfortable retirement? That’s the big question that many people struggle to answer even as it looms larger.

Research by the Department for Work & Pensions last year found that among non-retired people aged 40+, less than a quarter (23%) had a good idea of the income they would need in retirement.

It found only a minority who were saving into a private pension knew their contribution rate while many did not know the size of any of their pension pots. Even if someone does track these figures, retirement is still likely to remain an abstract concept – until it happens.

Failing the retirement stress test

People start to think seriously about life after work about 10-15 years before retirement begins. That may sound like plenty of time, but even those who have made some provision can still find it quite a tight timetable to ensure a smooth arrival rather than a crash landing.

Uncertainty and lack of confidence can affect employee performance and be bad for business. Financial stress and anxiety can impair sleep, affect health and ability to focus on day-to-day tasks.

Research by one pension provider earlier this year found more than half of UK adults aged 40+ are anxious about retiring, while 40 to 44-year-olds ranked retirement as more stressful than divorce.

Taking back control

The first step to dealing with retirement stress is to acknowledge and to understand the true scale of the issue. It requires embracing rather than ignoring.

DIY isn’t really an option for most people given the complex and challenging pension calculations. Other sources of information don’t fully meet the need either. For example, the government’s free, independent and impartial Pension Wise service is highly regarded, but mainly focused on the options at retirement not the years running up to it.

Similarly, a pension provider will give information about the value of their scheme, but not a holistic view of someone’s readiness for retirement. Professional financial advisers will give a thorough overview and recommendations, but may be too expensive for many people.

This leaves a huge gap that organisations are best placed to fill because – through the magic of technology – there already exist simple yet powerful solutions designed to work for a wide range of employees.

One example is Hub Group’s Pension Buddy Retirement Health Check, part of it’s life after work wellness programme. In a few minutes it can help people to figure out what their savings, pensions and investments could be worth in the future and, importantly, what income that could provide to support their life after work.

For those that want a more detailed picture Hub’s Destination Retirement service will let them review different scenarios and how their plans might adapt depending on their actions, seeing the results instantly in an easy to understand digital format.

Such a vision of the future can help give your employees more confidence and less stress when approaching retirement. Helping people take back control is a worthy goal.