Almost a third (32%) of respondents are unclear about the service Pension Wise can provide to employees, according to research by Close Brothers Asset Management.
Its survey of 700 employers found that 29% do not know who their employees are turning to for information around the pension reforms.
The study also found:
- 13% of respondents do not feel confident recommending that staff should look to Pension Wise for guidance, while 9% say Pension Wise is a huge support in offering help to staff.
- Almost a fifth (19%) of employees look to Pension Wise for information about the pension reforms, while 17% turn to financial advisors and 18% seek clarity from their employer.
- 9% of respondents believe staff are obtaining pensions advice from friends and family.
- 37% say that the pension reforms have encouraged them to take on a bigger role in the financial education of staff.
- 21% of respondents are taking steps to improve their support network for employees approaching retirement.
- Almost a quarter (23%) of respondents feel that they do not have the right provision in place to effectively support employees.
- 31% of smaller organisations (with a turnover of less than £500,000) do not have the right resources in place to support staff, while 18% of large organisations (with a turnover of more then £10 million) say the same.
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Jeanette Makings (pictured), head of financial education services at Close Brothers Asset Management, said: “Four months after the pension reforms were introduced, it’s clear that there is still some confusion.
“It’s crucial that if employers are directing their staff towards Pension Wise, they really understand the support it can provide and that the guidance it gives is not advice and so should sit alongside financial advice rather than competing with it.
“While it’s a positive that Pension Wise was extended, raising awareness of the service and the need to plan for retirement earlier, the lack of clarity around its purpose, and limitations, indicates that it’s not being used to its full potential.
“Directing staff to Pension Wise should not be the sum of total support that employers provide to guide staff. Options at retirement have become all the more complex, and education is the key to helping employees navigate their new freedoms.
“A financial education programme, whether this is through seminars, clinics or one-to-one advice, can help to build up understanding and engagement and can lead to them taking action to improve their financial wellbeing.
“Employers are a vital cog in helping staff make informed decisions about their future, and both will be better off in the long-term should this be a success.”