Pension legislation reforms earlier this year – which saw people approaching retirement granted greater freedom over how they use their pension funds – has prompted more and more young people to plan for their financial futures earlier, according to the latest research from Close Brothers
The asset management company’s latest Business Barometer survey, which questioned nearly 700 employers, saw 33 per cent of employers report a surge in staff seeking pension advice well before retirement age.
The findings also demonstrated an increase in employer proactivity with their workforce’s future planning, with 37 per cent saying the pension reforms had prompted them to play a bigger role in the financial education of their employees, and 42 per cent planning more financial engagement exercises.
A further 14 per cent suggested that they are pointing staff towards external expertise including financial advisers and the free and impartial government service, Pensions Wise (pensionwise.gov.uk).
“This is better news than could have been hoped for,” said Jeanette Makings, head of financial education services at Close Brothers, in the wake of the findings. “Already, just three months in, the pension reforms are not just encouraging those approaching retirement to think about their financial plans, but they are also turning the heads of the younger generation.”
Makings added that greater employer engagement with staff’s financial planning was also a huge positive. “It’s important for employers to remember the pivotal role they can play in the education of staff throughout their careers,” she said. “Retirement planning doesn’t just happen at retirement and the earlier people start using their workplace pensions and other benefits to improve their financial wellbeing, the better. The research is clear that while many have already taken positive steps, there is more that can be done.
“Employee financial wellbeing doesn’t just benefit individuals, it is crucial to business success, boosting engagement, retention and productivity.”