2015 was a year of great change. There is no doubt about it, the new pension freedoms have given people unprecedented flexibility when it comes to deciding what to do with their retirement savings.
As we look forward to 2016, we need to make sure we offer our employees the right support to help them get the best outcomes. To do this we need to make sure we are focusing on the right things.
The new flexibility comes with new risks. Many people are having to make decisions about things they, quite simply, have never had to think about before.
Decisions about what sort of income they want, when they want to take it and whether they want some of their savings to remain invested or not. They also have to think about how long they’ll live for and how sustainable their income is likely to be.
If we don’t support our people in the run up to retirement, they risk making the wrong choices. In some cases these decisions could be irreversible. This could prevent them from retiring when they want to, which subsequently could hamper your organisation’s ability to recruit, motivate and retain people.
Focus on the wrong things and you may miss out on delivering the right outcomes. I believe there are three key things we should all be focusing on, to help people get the right outcomes: how much is contributed to the pension, the funds the money is invested in and the decisions made on the run up to retirement.
Over the next few months, I’ll be inviting industry experts to discuss each of these topics, to see how providers and employers can grasp this fantastic opportunity to really make a difference.
The first thing we’re going to focus on is investments, and how a scheme’s default investment strategy can result in good member outcomes.
Susie Logan is Head of Business Communications at Standard Life