Jeanette Makings on choosing the right path when it comes to pensions and retirement
As a driver of wellbeing policy, pensions came in at only 4%, according to attendees polled at REBA’s recent webinar, Evolving financial wellbeing: money trends that are changing strategies, supported by Close Brothers.
Other drivers were:
- 44% – Mental wellbeing of employees
- 25% – Supporting lower earners
- 4% – Pensions
- 19% – Mitigating below inflation pay increases
- 8% – Recruitment/retention
But despite its low score, Makings said pensions would still form an important part of any employee pay package.
Time to take stock
With the recent changes to, in particular, the lifetime allowance, she said: “It’s not going to affect everyone to the extent that they’ll be saving at the top limit, but it does mean that everyone really should revisit their retirement plans, and look at what that might mean for what they are saving into their pension.”
Attitudes to pensions changed during the Covid-19 pandemic, with some people stepping back from the retirement ledge and then realising that they could afford to retire on less.
These changes in attitudes to retirement don’t just affect employees, but also the organisation and succession planning.
But a lot of questions are being asked about these changes, from what they mean to employees to what more employers could do.
What’s right for your circumstances?
If people only take advice once in their life, now is the time to do it, Makings said. “Please don’t make decisions without understanding your choices, and really understanding the choice that’s right for you.
“And if that means taking one-to-one guidance, then it should be worth every penny that that may cost you, because that decision is going to last you for the rest of your life; for potentially 30 years of retirement.”
While some people might want to withdraw a lump sum as soon as they hit 55, they should remember that these savings are there to last them for their entire retirement.
“It’s not all going to be used on day one,” she said, “and is the current economic environment right to take out a large chunk of money if you don’t need it?
“It’s about people understanding what they can do, but more importantly, what is right for them to do in their circumstances.”