With the implementation of auto-enrolment, is the provision of a pension shifting from the government to the responsibility of the individual and the private sector?

The proposed structure from 6 April 2015 is arguably one of the biggest changes to pensions industry. Individuals over age-55 will be able to draw on whatever funds they want from their pension scheme. Ways to do this include:

• Income for life i.e. lifetime annuity, scheme pension
• Funds into drawdown, known as flexi-access drawdown
• Single or series of lump sums from uncrystallised funds (known as uncrystallised funds pension lump sum)
• Combination of the above options

The significance of the changes cannot be underestimated and generates a need for a re-education to ensure that good member outcomes are achieved.

So what next for an employer who is interested in putting a financial education programme in place? The important step is to identify what your employees want and need. Promoting employee benefits is a good step and should not be ignored, however there may be other more personal areas that employees would value.  The major changes in pension being an area impacting on the vast majority.

Different generations will likely have different needs or wants. Younger employees may prefer assistance with student loans or early financial planning, whereas those closer to retirement may need to know more about their journey into retirement, how they can draw any income from pension plans, what state benefits are available and where to get them.

At Mattioli Woods, we have worked with employers of all sizes and provided different approaches such as employee surgeries, executive financial counselling, lunch and learn presentations. In addition to delivering retirement workshops and covering the technical aspects of pensions, we have teamed up with experts to provide help with the psychological impact of retiring.

Nicola Saltman – Employee Benefits Consultant

Mobile – 07530 598 150

Email – nicola.saltman@mattioliwoods.com