HR directors believe their workforce is as likely to look to their company for retirement guidance or advice as to the government, with 48 per cent believing employees will hold their employer responsible if they make poor decisions, according to new research.
Populus research of 100 HR directors of companies with more than 500 employees found 63 per cent expect staff to look to their employer for retirement guidance, with 62 per cent predicting they will look to the government.
The research, commissioned by Hymans Robertson, found 51 per cent of the sample were not confident Pensions Wise will provide their employees with adequate support around decisions at retirement, while 80 per cent of HR directors believe employees will expect some help from their employer, with only 41 per cent believing that employees are willing to pay for advice.
Hymans Robertson partner Rona Train says: “It’s very difficult to see how Pensions Wise will be able to give people the support needed to understand the range of options and the tax implications of any decisions they make. In that context, we’re surprised that around half of the UK’s biggest employers are confident it will be adequate.
“We agree with comments made by the ABI recently that a worrying amount of information regarding the guidance service for consumers is missing. We are entering unchartered territory and the details are not as clear as you’d hope. This is not surprising given how little time the industry, employers, regulators and even the government itself has had to prepare for what are the most sweeping changes to the pensions industry we’ve seen in our lifetime.
“In our view the two biggest issues are the quality of the guidance Pensions Wise will offer and the lack of support in place for people age 55-plus that can start drawing on their pension. The risk is that people will start eating through pension savings only to find they don’t have enough to retire when they want to.
“Individuals need advice, but they don’t value it, and certainly not enough to pay for it. Research we conducted last year showed that 57 per cent of people would ensure that they make the right decisions by ‘doing it themselves’. Only 22 per cent said they’d be willing to pay for external advice and of those they are only prepared to spend on average just £37 for it.”