How to help your employees get financially fit for retirement
The way people retire is changing. For many, it no longer means stopping work altogether the second they retire. Not only that, but these days, retirement income can involve much more than just the state pension and workplace pension.
Indeed, many people want to continue working part-time – or even set up their own small business – to keep earning an income. Some may also have other savings, property they rent out or can sell, inheritance, or state benefits. In other words, there are many different sources of income that could help cover costs in later life.
Plus, thanks to the introduction of Pension Freedoms in April 2015, there are many different ways that people can take their pension savings. That means people have more choice, but they also have greater responsibility over complex decisions.
All in all, there’s a lot to consider.
For your employees, many may not know what options are available or where to even start.
As an employer, you’re in a unique position to provide direct access to tools and support that can help your employees work out which retirement option is best for them. Here’s what you could do:
Get employees talking about retirement
A good place to start is to encourage your employees to think holistically about what they want from life after work. Retirement no longer means stopping work completely – it can look different for everyone. So what does it look like for your employees?
Consider creating a communications campaign that gets employees thinking and talking about their financial future. You could pin up posters or send e-cards that suggest conversation starters like: “When would you like to retire?” or “How would you make the most of your pension savings?”. This could spark ideas and help employees picture their ideal retirement.
If you’re with Standard Life for your workplace pension scheme, you can get access to ready-made materials to help kickstart your campaign.
Raise awareness of the different retirement options
There are several ways your employees could take their pension savings: taking cash in single or multiple lump sums; taking a flexible income (also called drawdown); or taking a guaranteed income (buying an annuity). They could also choose a mixture of these options.
To help employees decide what works best for them, consider raising awareness of the different options available. For example, you could create a dedicated page on your company’s intranet with all the details they need, and enlist your internal comms team to help promote it across your workforce.
You could also signpost to MoneyHelper, which has some handy information about the different retirement options. If you’re with Standard Life for your workplace pension scheme, employees can also watch the on-demand Are you financially fit for retirement? online event to learn more.
By boosting your employees’ knowledge, it could help them make better informed decisions about their financial future.
Help employees plan with online tools and resources
Based on Standard Life's Retirement Voice 2024 research planning makes a big difference to people’s financial confidence. In fact, 70% of those who do a great deal of planning feel confident they’re saving enough to have a comfortable retirement, compared to only 18% who do no planning at all.
As an employer, you can help boost your employees’ financial fitness levels by signposting them to online tools and resources that make it easier to plan for retirement.
A good starting point is to signpost employees to the Pensions UK Retirement Living Standards. This shows them how much they’d need each year to fund a minimum, moderate, and comfortable lifestyle in retirement.
Employees can also use Standard Life’s Mixed Income Builder tool. This allows them to check if they’re on track to meet the minimum annual income needed to cover their essential living costs, based on the Retirement Living Standards.
In addition, Standard Life workplace pension scheme members can use its Retirement Income Tool to get an idea of how their financial future is shaping up, or if they need to make any changes.
This article is based on Standard Life’s Are you financially fit for retirement? online event. Employees can watch on demand here.
For more ways to boost your employees’ pension fitness levels, visit Standard Life's Pension Engagement Season hub.
Supplied by REBA Associate Member, Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
