11% believe staff save enough for retirement

Jonathan Watts-LayJust over one in 10 (11%) respondents believe their employees are saving enough for retirement, according to research by Wealth at Work.

Its study, which surveyed 94 employers, also found that 40% of respondents do not offer their workforce financial education around the options available to them under the pension freedoms, which came into effect in April 2015.

The research also found:

  • Around a third (32%) of respondents do not give their staff access to the pension flexibilities through their pension scheme at retirement.
  • Just over a quarter (26%) of respondents do not allow employees to take any money from their pension from the age of 55 while they are still working for the organisation.
  • 43% still default their employees to an annuity-tracked glide path.

Jonathan Watts-Lay (pictured), a director t Wealth at Work, said: “This is pretty alarming given the significant fall in annuity purchase over the last 18 months. In the new world of freedom and choice, in pensions, an annuity-tracked glide path might not be the most suitable option and it may leave many on an investment route which is not correctly aligned to their retirement plans. This could potentially result in a reduced income at retirement.

“It is crucial that employers provide financial education about the different options available in order for employees to make appropriate selections to help optimise income at retirement.

“It is deeply worrying that employers believe their employees are simply just not saving enough. There are also increasing numbers of employees auto-enrolling at levels which are almost certainly too low to provide sufficient savings for a secure retirement.”