Workers demand employers’ advice on pensions

The firm’s 2010 Workplace Pensions Report showed 40% of respondents said that employers providing a pension should also offer full financial advice. And another 55% said they should offer some kind of general information about retirement planning.

Last year, 78% of respondents said they expected employers to support them in either of these two ways.

Speaking on the sidelines of the 2010 UK Leadership of Pensions Summit, John Taylor, market director of corporate pensions at Scottish Widows, said this increase might be a reaction to the financial crisis.

However, providing financial advice of this sort might be quite costly for an employer. One option available to employers could be to pay for an independent financial adviser to help employees. Taylor said a limited number of companies are already doing it.

Another option could be to offer online support. Taylor said: “Technology advances provide us with opportunities we have never had before.”

In order to overcome the problem posed by the lack of computer literacy of some workers, employers can organise presentations to inform employees about pensions, but this option can also be challenging in terms of costs.

Taylor added trustees should dedicate more attention to defined contribution schemes. “Trustees spend 90% of their time on defined benefit pensions. A change is needed,” he said.

Less than half of respondents (48%) who could and should be saving for retirement are currently saving adequate amounts, while one-fifth of those surveyed are saving nothing.