If trustees and employers do nothing else, there are five simple things they should ensure their members do when planning their retirement:
1. Pension statements - get an up to date statement of all pensions including the State Pension (www.gov.uk/state-pension-statement). This allows members time to trace old pensions, review the benefits of consolidation and gives them the baseline for planning how to fund their retirement.
2. Pension modellers - use a pension savings modeller to see what size of fund/ income the combined effect of all pensions are expected to provide at retirement. Use an at retirement modeller to see what lifestyle those pensions can support in retirement.
3. Boosting pensions - members can contribute to their pension, within their allowance limits, until they take their pension. Subject to scheme rules, this can include making lump sum payments say from a bonus, increasing contributions in line with pay rises, transfer of share save and share incentive plan shares (within time limits). Every little helps to build a bigger pot for when they retire.
4. Investment fund - members need to understand where their pension is invested and review whether this is still the most suitable strategy for them in the run up to retirement. This is particularly important for those in default funds that move pension savings into less volatile assets in the years ahead of retirement. With the pension freedoms, this may no longer be the best strategy for some members.
5. Financial education and advice - providing financial education to members in the years ahead of retirement will ensure they understand these top tips, they are fully aware of their choices and give them the confidence to make better informed decisions. At retirement, more members will also need access to advice and so providers that are independent of the pension scheme and that can deliver both education and advice offer an unbiased, trusted and improved member experience.
With retirees able to make huge decisions around their pension pots, Helen Swire draws together some top tips on what they need to consider – and how schemes can help