Workplace pensions - retirement ready?

Are employees retirement ready?

While 51% of employees have given their financial needs in retirement a lot or quite a lot of thought, only 18% have a clear retirement plan. This can support conversations with clients about whether their workplace pension strategy is helping employees move from participation towards active retirement planning.

How can you help employers engage different parts of their workforce?

Retirement planning and engagement vary across the workforce. Only 13% of employees aged 35-49 have a clear retirement plan, while 68% have never sought advice or help about their pension savings.

What does retirement readiness mean for you and your employer clients?

Financial advisers were the most trusted source of pension support among recent users, yet only 11% of employees had used an adviser in the previous year. This presents an opportunity to help employers make advice, guidance and pension support more visible and accessible.

Demand for advice increases as retirement approaches. FCA data shows 45% of employees with retirement or pension savings, accessing defined contribution pension pots worth more than £30,000, do so with advice. Advisers can help employers use their trusted position to offer guidance and encourage engagement, while using their own trusted status to provide advice at key retirement decisions.

How can advisers use the research with employer clients?

Use the findings to start conversations with employers about:

- How many employees are actively planning for retirement?
- Which groups engage least with pension communications?
- Do employees know where to access guidance or advice?
- Do employees understand their retirement income options?
- Could webinars, clinics or targeted communications improve engagement?

How can you help employers address the retirement support gap?

64% of employees have never sought help about how much to save into their pension, while 63% have never sought support about their retirement options. There's an opportunity to help employers increase awareness of available support and encourage earlier engagement.

How can trust translate into greater engagement?

Among employees, with a workplace pension, who received pension-related advice in the previous year, 76% gave advisers a trust score of eight to ten out of ten. Employers also rank highly as a trusted source of support.

Yet only 11% of employees had used a financial adviser during that period. This highlights the role for advisers in helping employers and members understand available benefits.

What could Targeted Support mean for workplace pension conversations?

50% of employees say they would be likely to use Targeted Support. Advisers can use this finding to discuss how information, guidance, Targeted Support and regulated advice could work together as employees' needs evolve.

Find out more about Targeted support

Why does retirement-income understanding matter?

Almost half (48%) of employees paying into a defined contribution pension do not understand income drawdown or have not heard of it, rising to 59% of women. Advisers can use this insight to encourage earlier education and conversations about when advice may be appropriate.

Why should retirement-income understanding be part of adviser conversations?

35% of employees expect to gradually reduce their working hours before fully retiring. 34% want certainty that their bills will be paid for life, alongside flexibility to access additional money. Advisers can use these findings to support conversations about retirement income options and planning.