Employers are increasingly opting for in-house pensions advice over government advice schemes, according to a Close Brothers Business Barometer report from Close Brothers Asset Management.
The report found that now only 16% of employers are referring staff to Pension Wise (the government’s free guidance service) compared with 20% in October 2015. However, 30% of employers said they'd responded to pension reforms by providing pension engagement for all staff, compared with 25% in October 2015. This suggests employers are increasingly turning to in-house methods.
More than a third (36%) of respondents said they give their staff access to financial advice to help them understand the best options for them in retirement, while 14% use retirement seminars to help employees understand their choices.
These figures come in the wake of the chancellor’s announcement that the government would replace Pension Wise, the Money Advice Service, and the Pensions Advisory Service with a new slimmed-down money guidance body.
Jeanette Makings, head of financial education at Close Brothers Asset Management, said employers are taking the initiative, with more arranging bespoke guidance for their staff rather than using Pension Wise. “This is not really surprising as employers will not only want the guidance to cover their own pensions and benefits, but they will also want the support [given] to reflect their own values and their particular people culture,” she said.
“The recent budget saw an increase in the tax and NI relief limit for pension advice in the workplace, encouraging more employers to arrange pension advice for staff, which is hugely positive and is a real signal of an expected increase in demand. It is encouraging to see more employers are already increasing their support for staff, engaging them with the pension reforms, and providing dedicated retirement seminars. “
However, she added that more could be done here. “Employers play a central role in staff wellbeing, and ensuring they are well informed about how to make the most of their workplace benefits, including pension decisions, is essential for staff retention and protecting the business bottom line,” she said.