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When faced with making high-stakes financial decisions about how to turn pension savings into retirement income, many people are unsure of what to do. Fortunately, with the right tools and support, there are plenty of ways employers can help members decide what’s best for them.
Since the introduction of the Pension Schemes Act in April 2015, people with Defined Contribution (DC) pensions have had more choice over how they can take their pension savings.
Whilst this has given members more flexibility, it’s introduced greater responsibility over complex decisions too.
Indeed, according to our Retirement Voice 2025 report, those aged 50+ with a DC pension are the least confident about how to turn to their pension savings into an income; around a third (32%) say they’re “not very” or “not at all” confident.
Many members – especially those who are thinking about or approaching retirement – may be in the same boat. After many years of working and saving into their pension, they now need to understand how to convert their savings into an income – and make it last. So it’s not surprising that confidence levels may be low when the financial stakes are so high.
So what can your clients do to help demystify the different retirement options and support their members in making decisions that are right for them?
Every retirement is different
Retirement is personal and different for everyone. So there’s no one-size-fits all approach to supporting members with their retirement decision-making.
The key is to provide intuitive tools and resources that empower members to feel more in control of their future finances.
Here are some ideas to help your clients get started:
Help members picture their future
When helping members understand their retirement options, it’s worth your clients taking a step back, and first helping them get an idea of how much they need to fund their retirement income. This can give them a better grounding for making well-informed decisions about their future.
Standard Life’s new Retirement Hub can help, providing one easy-to-navigate space for members to access different tools and resources to help them feel ready for the future.
Your clients could also signpost members to Pensions UK’s Retirement Living Standards, to help them understand what level of retirement they’re on track for. This provides a benchmark level of the annual income people will need to fund different standards of living in retirement – ‘minimum’, ‘moderate’, and ‘comfortable’.
Boost members’ financial confidence
Knowledge is a big confidence booster. By helping members get a better understanding of how the different retirement options work, it could make a real difference to their ability to make confident decisions.
Despite the benefits, it can be tricky to find the time to learn something new, especially if members are unsure where to start.
Signposting to content that’s relevant, simple, and addresses members’ specific concerns, can be a big help.
For instance, members can visit our Retirement Hub to help guide them towards information that reflects what they want from their pension – such as more security or more flexibility. They can also choose from different content formats such as bitesize guides, retirement stories, or webinars. That way, members can pick and choose the information they need – rather than feel overwhelmed by information overload.
Your clients could also signpost members to online resources like MoneyHelper. This covers a range of topics around pensions and retirement, in jargon-free terms, to help increase their knowledge.
Offer tools that compare the options
With the luxury of choice comes the pressure to make the right decision. And when faced with multiple options, often a good way to decide is to weigh up the pros and cons.
Our retirement options tool makes it is easy for members to do just that. After entering a few simple details, members will get a breakdown of each of the retirement options they could choose from Standard Life. This includes how much they’d get from each option, such as taking a flexible income or buying an annuity, how long their income is likely to last, and some pros and cons to consider.
By getting a visual comparison of all the options, this can make it easier for members to see which one aligns best with their needs and goals – and make the right choice for them.
For more information on how to support members, take a look at our financial wellbeing articles for some ideas and inspiration.
To read more articles from Standard Life visit the content hub on Corporate Adviser – here.
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www.standardlife.co.uk
Phoenix Life Limited, trading as Standard Life, is registered in England and Wales (1016269) at 10 Brindleyplace, Birmingham, B1 2JB.
Phoenix Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
