Employers are seen as a less credible source of advice around pensions than family and friends, with just 26 per cent of 40-65 year olds likely to trust financial advice given by their employer, new research has found.
Independent financial advisers were seen as likely to give the most trusted recommendations around pensions savings, considered credible by 55 per cent of those polled, with 51 per cent trusting the government’s Pensions Wise guidance offering and 33 per cent trusting their bank or pension provider. 27 per cent trusted family and friends. Only the media, trusted by 8 per cent, was seen as a less trusted source for such advice, the research, conducted for JLT Employee Benefits through a poll of 2,000 workers aged 40 to 65, found.
The survey found than just 23 per cent of 40 to 65-year-old workers say their employer currently offers retirement advice, with 51 per cent certain that they do not and 26 per cent not knowing whether they did or not. The poll found 65 per cent of these said they would like to be offered advice.
Understanding of financial products was found to be very low with 46 per cent not knowing what an annuity is, with 68 per cent unaware of what flexible access drawdown is, 81 per cent not understanding what an enhanced annuity is and 90 per cent unaware of the uncrystallised funds pension lump sum. The research found 79 per cent did not know that pension savings can be accessed to pay for financial advice.
JLT Employee Benefits director, pension decision service Richard Williams says: “Our research reveals an interesting paradox. It is clear that too few employers are offering sufficient support to their employees around pension savings, and that advice as a benefit is not as commonplace as it perhaps should be. However, although the desire to have more support is there, the scepticism around employers offering such a service will need to be overcome. The quickest route to solving this perception gap for most employers will likely lie in partnering with reputable experts who can be the credible face of pensions advice and a portal to greater employee engagement with their occupational savings.
“A lack of engagement fosters a lack of awareness, and this research shows how far the pensions industry still needs to go to properly engage with savers and get them thinking about their retirement. Post RDR, a lot of people see financial advice as expensive and out of their reach. In addition to getting more employer support it is vital that the message around the importance of getting advice is made alongside ways people can fund it.”
