HR professionals need to start talking to their workforce about pensions earlier, according to Charles Cotton, performance and reward adviser at the CIPD.
Speaking at the Xafinity Freedom and Choice: One Year On event Cotton said that many organisations are bringing up the subject too late. “Many start discussing the issue [of pensions] at around the age of 55, but that may be too late,” he said. “The workforce is ageing. In our recent survey businesses said that 18% of their workforces are over 60, but by 2020 that will rise to 28%.”
Cotton also suggested that as young people are graduating with large debts it can be difficult to know exactly when to start discussing saving money for the future. “It’s very important that you try to find time to think about it,” he said, and recommended organisations look into financial coaching and education for their employees.
Steve Webb, director of policy and external communications for life insurance and pensions provider Royal London, warned that it's been hard to measure the impact of the new pensions freedoms. “People ask 'so how do you measure it?' It’s not easy, as everyone is using them differently.
“What if people want to use some of their money to go on the holiday of a lifetime, or pay for a child's wedding? Who can say if that was the ‘wrong’ thing to do? Yes some of their money is gone, but they have that photo of the wedding or holiday on the mantelpiece and they will think of it every day of their retirement.”
The executive director for regulatory policy at the Pensions Regulator, Andrew Warwick-Thompson spoke on the dangers pensions changes can present. “There is a significant risk that if we force employers to change their pensions programme they may disregard them all together,” he warned. “Some have expressed strong views; telling us to stop messing them around.”
“If you show you care about the futures of your employees that will be reflected in the way they show their loyalty,” Cotton added.
