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Increased living costs and insufficient pension funds have forced many retirees to go back to work. Employers can play a key role in helping people engage with their pension – and increase their chances of achieving their retirement goals.
As people’s finances are stretched to their limits, more retirees are being forced back into the workforce. That’s according to Standard Life’s Retirement Voice 2023 report, which reveals that 1 in 7 (14%) retirees aged over 55 have gone back into work. And a further 4% are considering it.
So what’s driving people to unretire? Almost two thirds (64%) of over 55s who’ve returned to work say income issues have been the driving force behind their decision. A third (32%) say their living costs have increased more than they’d expected, meaning they’ve needed to return to work, and a quarter (24%) have realised their pension is not providing enough income to live on.
The cost of living crisis has piled the pressure on people’s finances over the past few years, and almost everyone has been affected to some extent. So it’s no wonder that people are having to rethink their retirement plans.
Employers can play an important part in helping members maximise their pension savings and stay on track for the retirement they want. Here are six ways your clients can support their members:
1. Promote employer matching schemes
If your clients offer a matching contribution scheme – where they pay extra pension contributions to match the amount members pay – they should shout about it. This could encourage members to pay more into their pension than the bare minimum, helping them get the most out of their workplace pension scheme.
2. Communicate the tax benefits of bonus sacrifice
If your clients offer a bonus sacrifice scheme, their communications should be clear and simple to help members understand the potential tax benefits.
They could explain to members that putting some or all of their bonus into their pension plan could help them keep more of their money, because they’ll be paying less in tax and National Insurance. Plus, it’ll give their pension pot a real boost.
3. Focus on financial education
Helping members understand their money better can make a positive difference to their overall financial wellbeing. As a result, this can help them feel more confident making decisions about their financial future.
To help boost members’ knowledge, your clients could signpost to financial education content. MoneyHelper is a good place to start, providing guidance on a range of financial matters.
If your clients are with Standard Life for their workplace pension scheme, members can get access to bitesize content, tools, and videos through our Money Mindset platform. Covering topics such as managing everyday money and planning for retirement, Money Mindset allows members to improve their financial knowledge whenever and wherever it suits them.
4. Help members locate lost pensions
It’s likely that many members have had several jobs throughout their career. That means they probably have a few old pension pots dotted around.
Helping members find old pensions could give them a better idea of how much they’ve got.
Your clients can signpost them to tools that help them locate lost pensions, such as the Government’s Pension Tracing Service.
Standard Life workplace pension scheme members can also use our Pension Finder tool, available through Money Mindset. This takes their employment history details from LinkedIn and uses these to automatically search the Pension Tracing Service – making it quick and easy to find old pensions.
5. Provide online retirement tools
Understanding what kind of retirement lifestyle they’re on track for can help members make better informed decisions about their money.
Our Retirement Income Tool, available to all Standard Life workplace pension scheme members, can help them see what their retirement income could look like and if they need to take any action.
6. See which RLS bands members fall into
We know that some retirees returned to work because their pension savings weren’t enough to cover their living costs. So it’s important to support members who are most at risk of having insufficient savings.
Our Client Analytics platform incorporates data from PLSA’s Retirement Living Standards, so your clients can see where members are projected to fall within each RLS band. For those who are most at risk of falling into the ‘minimum’ or ‘below minimum’ bands, your clients can create a targeted campaign to help them get back on track.
For more information on financial wellbeing, including resources on how you can help support your employees, take a look at our Financial Wellbeing hub and read our articles.