Survey finds companies ignore older workers heading for retirement
New research from Punter Southall has found six out of ten employers do not help staff as they approach the age when they can claim their pension.
A survey of more than 300 companies revealed they did not offer any guidance on steps to take as people reached 55, when they can legally unlock some of their savings.
The research comes as the pandemic has forced many people to rethink retirement, with the Institute for Fiscal Studies saying a third were worse off financially and one in ten carrying on working for longer.
Punter Southall’s survey highlights that employers are deterred from providing workplace financial guidance because they worry about the cost of financial advice and fear falling foul of regulations. They also have the misconception that the over-50s have fewer money worries.
Peter Selby, Managing Director, Retirement Services, at Punter Southall, says: “The 55s are a forgotten generation when it comes to financial education, support or guidance as companies tend to focus on their younger colleagues. This is a critical time for this age group as they can start taking money out of their pension, but there are pitfalls – such as paying too much tax, or withdrawing too much and depleting their pension savings too quickly – if they do it without guidance or advice.
“We’ve found concerns over cost or regulations are worrying employers considering financial guidance, but the right adviser can confront these worries, offering value for money and achieving positive outcomes that can help people make the most of their retirement and ensure they remain on the right side of increasingly complex regulations. Companies invest a great deal in supporting their people throughout their careers and it makes sense to do the same as they set out towards retirement.”
Further survey findings reinforced this final point, with eight out of ten saying their company and people would benefit from being better informed about all things financial; and retirement planning topping the list of what employers think would be most valuable.
Since pension freedoms were introduced in 2015, tens of thousands of savers with large pensions have been making withdrawals at such rapid rates they risk running out of cash in retirement, new data from the Financial Conduct Authority, the City regulator, reveals.
Not only that, the extra tax paid means the government has raised GBP2 billion more than it expected from people opening their pots at 55.
With one in three of the workforce forecast to be over 50 by 2025, Punter Southall also recommends a ‘Midlife Review’ for older employees, focusing on mid- to long-term plans, which considers finances, continuing career aspirations and overall wellbeing. These reviews help employers reduce the risk of losing valuable experience and ensure people can continue to enjoy fulfilling careers, contributing as much as possible for as long as possible.