Prepare your employees early on...
Recently, I’d run into a grumpy company owner who had become frustrated with a number of his employees who didn’t want to retire because they didn’t think they could afford to.
The owner was particularly frustrated because he felt he had spent years investing in his employees’ pensions and developing good comms around pensions – and now, from his point of view, that investment was not paying off.
Obviously, it’s better if you can prevent that situation from ever building up.
But what if that didn’t happen, and you find your company has too many employees over the State Pension age, affecting your succession planning?
So what can you do to help them take the plunge into retirement, after all?
To give them access to expert guidance and advice....
Get your employees financially fit!
I believe that many of those people who think they can’t afford to retire are often wrong, but they simply don’t have the financial knowledge to ensure they get the best outcomes from their pension.
I’ve seen, for example, people who were told they were entitled to a £10K guaranteed lifetime income (known as an annuity) on their annual benefit statement, accepted that at face value (not realising that these are only projected figures dependent on many variable factors), and so they refused to retire. Of course an adviser would help them go to market to obtain the best possible rates for an annuity or buy a different solution – but they would never be able to do that, or even know about that option, alone.
And every member of your HR team is doubtless bombarded by phone calls and messages from staff members in the final years of their work life, asking basic questions about what the State Pension age is, how much tax-free cash they can take, and – everyone’s favourite - “can you retire me early?”
They are not financial experts, and it’s only natural they need help figuring out how to make the best of the pension pot they have accumulated.
Employee engagement ideas
This is an integral part of our five-step model to change workplace savings behaviour and enable retirement. We recognise that it is not enough to guide and educate people about pensions throughout their entire working life. You need to help get them over that final hurdle in the final years or months, as well.
That’s why part of our service is to offer your employees access to a specialist in the run-up to retirement. In a face-to-face meeting or over the phone, they can point out things your staff would otherwise not have considered – and help them figure out a path to retirement.
We also have a pensions hotline which your employees can access (this will divert many of those questions which your HR team has to tackle regularly!).
If you're interested in our services, and would like to find out how we can help your business
👉 just click here!
Don’t just leave it to your employees and assume they’ll have all the answers. They won’t. And why would you want to let them work out alone whether they can afford to retire at this final stage, anyway?
If you’ve spent years helping them to save with as many employee engagement ideas as you can think of, it’s a shame to see it all go pear-shaped right at the end. That’s your company’s investment which is not coming to fruition. Many might even argue that you have a duty of care to your employees to make sure that doesn’t happen.
And of course, ultimately, it’s in your interest to help your staff get over the finish line, and actually retire. Otherwise they might be around a lot longer than you’ve planned for.
Topics: Next Generation Savings