UK 
United States
By Sarah Herd, Head of Workplace, Wren Sterling
If your company is just buying a cake and waving retiring employees off into the night after a buffet in a local pub, you are probably falling short in your duty of care responsibilities as an employer.
If that sounds a little unfair, you just have to remember that retirement is likely to be the single biggest decision of your employees’ life. In a world where employers are providing workplace pensions and carrying out governance on that pension, failing to provide financial advice options feels like a miss. It’s also the sort of sticky benefit that retains employees, as they can see real value in the service that their employer has facilitated.
Whether employees have enough money for retirement is a primary concern, but there’s also how prepared they are mentally for it, and crucially, whether they’re going to make the right financial decision with so many options available.
What do retiring employees need to know?
Where do you start? Jargon, for one. A recent poll found that six in ten people 'don't know' their pension is invested, and we have a lot of negative perception around the term “risk”, which can inhibit employees investing their pensions appropriately to generate the returns they need to sustain themselves in retirement.
It’s reasonable to expect in the main, employees also don’t always understand what an annuity means, or flexible drawdown, or whether their pension can pass to their spouse or not.
Financial education sessions drip feed this knowledge into employees so they’re slowly building an understanding and becoming aware of more around them, speaking to their friends, colleagues and family about it and starting to form their plans and ambitions.
Importantly, it can help stop them falling for scams. It’s sad that we all have to keep reiterating this, but pensions are prime for scams. They’re high value and knowledge is poor – working with an independent financial adviser significantly reduces that risk straight away.
When is the right time?
Wren Sterling gets enquiries from people who have retired, and some who started drawing their pension or bought an annuity and they want to know what to do. That’s too late. If they’re using government services because they’re a few months away from retirement… too late.
We typically tell employees who are five years out that they need to start having conversations with experts to make a plan. That’s how we help our clients to prioritise their workforce and we proactively contact employees to offer our Retirement Desk service.
Gaining a basic understanding of retirement in the years building up to it can focus their mind, and importantly, it gives them the chance to change any habits to maximise the quality of their lifestyle in retirement, like paying in more, and increasing or decreasing investment risk.
How can they find someone to talk to?
At Wren Sterling we work with very diverse workforces, in the nature of their work. There’s office-based staff, warehouse workers, drivers, off-shore workers, time-poor lawyers – we’ve covered them all.
Our common approach is that we want people to feel confident talking about their financial situation, so we accommodate them. We run on-site clinics, out of hours consultations as well as regular video conferencing appointments.
Interested in finding out more?
Wren Sterling’s Retirement Desk is a service we offer our Workplace clients – we don’t just do employee benefits consultancy.
They each get a dedicated Financial Planner, who is able to arrange contact with all retiring employees to understand their situation and concerns through a free initial 30-minute consultation. Where the employee wants to continue the conversation, they can appoint the Financial Planner to work with them to create their own financial plan and can stay in regular contact right through to retirement’.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.
