08 May 2025

What employers can do to support retirement decisions

Following the removal of the default retirement age, we’re typically living longer, more active lives.

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The concept of retirement has unsurprisingly evolved. 

When and how people retire has never been more complex. 

Add in the current market turmoil and we have something of a perfect storm.

For employers, there is a balance to be struck between retaining the right level of experience for their business to thrive and avoiding workforce stagnation, where younger employers are unable to progress as they perhaps should. 

While not particularly left field, here is a short checklist of the gaps in pre-retirement support. 

These are all achievable actions every business should employ, but very few do all of them and do them well. 

Help to design a life after work

Employer support tends to focus on financial decisions, but it’s very hard to know how much money is enough if you don’t know what your life is going to look like. 

US author and commentator Riley Moynes talks about the ‘Feeling Lost’ phase of retirement after the initial honeymoon period. 

This is followed by a ‘trial and error’ phase.

Plenty of time and money can be wasted the longer those phases go on. 

Picture a retirement course or workshop, with a focus on firstly planning the lifestyle that meets a retiring employee’s holistic future needs. 

It’s an opportunity to consider the mental, physical and social health perspectives alongside financial matters. 

This can be truly valuable, whereas a lack of a clear life plan can be a barrier, leading to inertia and procrastination driven by too much choice.

Offer an incentive

Age discrimination legislation dictates that you can’t ask employees when they are going to retire, but you can provide an incentive for them to tell you. 

There’s a growing trend of employers offering to give retiring employees a day off each week for the last few months of work, providing they confirm their agreement to leave at a set point with say six months of notice. 

This gives the employer ample time to find a replacement and the departing employee to handover work or clients in good time, passing on as much of their relevant knowledge as is required. 

The day off also allows the employee time for accompanying life admin and planning tasks, which might otherwise be a distraction during the working day.  

Financial advice vs support 

Most employers or trustees undertake appropriate due diligence to appoint firms to provide quality pension and retirement support. 

Reinforce what is available on a regular basis, certainly to your community who are 50+ and likely to be heavily marketed for advice.

Just as good quality regulated recommendations can be a godsend for some approaching retirement, unnecessary expensive advice can be harmful. 

Many employers are uncomfortable talking about financial advisers, but it’s important to stress the need for employees to only pay for advice when it’s really needed and beneficial.   

Getting investment strategy right

Few employees understand the need to align where their pension is invested to when and how the money is going to be taken. 

The main pension providers change their default funds on a relatively regular basis, but the transition across from the existing strategy isn’t always straightforward. 

Sometimes employee or employer consent is needed and a switch to the new strategy doesn’t take place, either for existing funds or for future contributions 

Of course, both default strategies could be wrong for the individual concerned. 

Is the assumed retirement age correct? 

Is the method of withdrawing funds the strategy is designed to be match correct?  

There may even be religious ramifications to consider, when making investment and retirement decisions.

Ensure you’ve got the right investment choices open to your workforce first and foremost. Then, it’s a case of  education, education, education.

Supplied by REBA Associate Member, Verlingue

Verlingue – an independent, family-owned Employee Benefits consultant supporting UK and multinational businesses with Retirement, Reward, Healthcare and Protection consultancy and advice.

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