At Retirement Support (with its unfortunate acronym) is not high on workplace pension provider’s priority lists and this is reflected in this survey published by Pensions Expert in an article by Stephanie Hawthorne
The survey, conducted by Broadridge, was of 152 employers. Several employers said they would switch providers if their incumbent did not improve its service to staff:
“Member experience is a vital issue for us – if our members are not being supported then this is a big problem, and would encourage us to switch.” one employer told Broadridge
The dilemma – too much choice – too little support
Few people are formally retiring right now, of the 650,000 of us who reach 55, the earliest point at which we can access our savings, only a tiny number will leave the workforce. For most of us, the future will be one of changing work patterns and uncertainty. This uncertainty is worsened by the impact of the pandemic and the end of furlough in October.
The dilemma for many who have been saving into workplace pensions will be that they have too many choices.
The FCA recognizes that many savers in workplace pensions will not have access to advice as to what to do and are likely to be vulnerable if they have access to their pension savings but no clear retirement plan, I have likened these savers to ships sailing through the Strait of Hormuz, laden with oil, under threat of scams , with precious little support.
They have tasked the providers of contract based workplace pensions to provide the unadvised who reach 55, with four simple options from which to choose
- Keep your money invested for later
- Take your money now
- Convert your pot to an income for life by buying an annuity
- Start drawing down your pot as an income
Where support is available
Pensions Wise offers straightforward help to anyone over the age of 50, needing to understand their options. We suggest everyone books a Pension Wise interview, it is the platform for future action
The providers of workplace pensions should be competing for your attention at this point . But as the survey shows , they are not geared up to meet the demand for aggregation. This is why pension aggregators like Pension Bee, Open Money and Profile Pensions have proved successful.
But we think that more is needed than can be provided through Pension Wise or its parent the Money and Pension Service
A universal application to help
At AgeWage, we are targeting our service to help people who are at that point of their life when they are needing to turn pension pots into retirement plans.
We think there are a number of simple things they can do , using a simple universal app.
- Find pension pots , understand their value and make a plan to bring them together
- Model their likely income in later life using simple software
- Look at the income that could be had from purchasing an annuity
- Take financial advice where necessary
We are expecting to trial this app with a group of nearly 500 testers . We are hoping to do this within the FCA’s sandbox and to track and trace how our users react to the options made available to them. We hope to pass on the results to the FCA and to the Pension Dashboard Program.
You can join us
If you are interested in helping those people who are approaching an uncertain future with little support, you might like to help to test our app yourself. We still have space in our user group. The work will take 2-3 hours and in return for your working with you, we will help you to find your pension pots, understand what you are saving into and give you easy next steps for the future.
Who knows, we might even be able to help some of the providers of workplace pensions who appear to be struggling.
To join the test group mail firstname.lastname@example.org