Pension news
Employers can do more NEW RESEARCH from online pension advice experts, Wealth Wizards, indicates that inertia around pensions may be starting to subside with over a third (36%) of those surveyed reporting that they now prefer to save more into their pension, even if it means taking home less pay. The research, which was conducted by Populus in March 2017 with a representative sample of 2,000 people, found that: ● 68% of UK workers would prefer their employer to put more money in their pension than give them common employee benefits like discount vouchers for shops or gym memberships ● two thirds (66%) would be keen to hear about a way of saving that meant they would still have enough money left over to enjoy life ● over a third (37%) of those in the UK have become more concerned with their pension following recent focus in the news on the subject. Some 30% of respondents said they wouldn’t know where to start when it came to saving for retirement and 29% have never had a conversation at work around their pension. In fact, only 23% said their employer has increased focus on their pension at all in recent months. Phil Blows, director, Wealth Wizards said: “… it is also the responsibility of employers to ensure that their employees are fully equipped with the right information to make the right decisions… While advances like auto-enrolment have meant that most employers are duty bound to provide their workers with access to a pension facility, it is equally important that they provide access to advice so that employees can ensure that they are making the most of their assets.”
State pension review report THE FINAL report of the independent review of the state pension age (‘the review’), which was conducted by John Cridland, was published in March (http://bit.ly/2nRqIeV). The review commits to a universal state pension age (SPA) across the United Kingdom (UK) which should increase to reflect changes in life expectancy, recommending that it should: ● rise to age 68 over a two-year period starting in 2037, and ● assuming that there are no exceptional changes to life expectancy data, not increase more than one year in any ten-year period. Observing that a large proportion of caring is undertaken by people approaching SPA, and that changes in SPA are likely therefore to affect this group, the review believes that employers and the government should do more to help carers in the workplace. It recommends that: ● all employers should have eldercare policies in place which set out a basic care offer ● for those with caring responsibilities a system of statutory carers’ leave be introduced as soon as possible, but at least ten years before SPA increases to 68. This could be based on the statutory sick pay model, for perhaps up to five days, to enable informal carers to provide emergency care. The review also recommends that: ● people should be able to access a mid-life ‘MOT’ facilitated by employers and by the government using online support and through the National Careers Service ● government and employers make more use of older workers as apprenticeship mentors and trainers, passing on skills from one generation to the next, with work on implementing these recommendations beginning immediately.
LISA and workplace pension savings THE LIFETIME individual savings account (LISA), which became available on 6 April for individuals under the age of 40 and which can be used for buying a first home or for retirement, has prompted expression of concerns. WEALTH at work carried out a poll from August 2016 to early 2017 and found that 42% of employers who responded will provide access to the proposed LISA through their reward packages. Jonathan Watts-Lay, director, WEALTH at work, said: “Employers will need to think about how they can support employees who all want to save in different ways. For example, we already see many companies giving employees a percentage of their salary to buy ‘benefits’ so could this be a method of funding the LISA in the future? Whether employees decide the LISA or another savings method is right for them, the need for financial education, guidance and advice has never been more apparent.” Steven Cameron, pensions director at Aegon, said: “When saving for retirement, virtually all employees will be better off making full use of their workplace pension where they receive a valuable employer contribution. We are pleased that the [Financial Conduct Authority] will require all those promoting the LISA to warn employees that it is not a good idea to choose a LISA over a workplace pension.” Nigel Peaple, deputy director at the Pensions and Lifetime Savings Association, said: “While the LISA can be the right choice of retirement saving product for some groups in the workplace, such as the self-employed, overall we do not believe the LISA should be used as a replacement for a workplace pension…Crucially, unlike workplace pensions, the LISA does not benefit from mandatory employer contributions.”
| Professional in Payroll, Pensions and Reward | May 2017 | Issue 30 40
Made with FlippingBook - Online catalogs