With the advent of defined contribution (DC) pensions, pension freedoms, reduced lifetime and annual allowance limits and increasing longevity, more pension savers than ever now need access to advice throughout their lifetime as well as at retirement.
However, the perception is that this advice is costly and many people don't know where to go to find a suitable adviser.
But help is at hand and it's your employer that can provide this.
Since November 2017 there is an allowance of £500 per person, per year for pension advice, when this is arranged via employers in the workplace.
This is available via pension advice vouchers which operate in a similar way to childcare vouchers. Employees can sacrifice up to £500 of their salary each year to buy a pension advice voucher which they can then use to pay a financial adviser for pension advice.
When done via salary sacrifice, this could cost an employee as little as £190 (dependent on their tax and NI).
However, this will 'buy' £500 of advice and for many financial advisers who offer modular, focused advice this is likely to be all an individual would need to check that their pension plans are on track, or that they are invested in the most suitable investment or to model a possible retirement date.
Employees can use it with any adviser they choose and it can be in respect of any pension - not just the one offered by their current employer.
One reason many providers think that this has gone largely unused to date is that employers may be concerned about promoting advice. However, similar to childcare vouchers, making this voucher available will improve financial wellbeing and there are many ways employers can ensure these risks are managed; address the process and the risks in all communications; not recommending a selected financial adviser; or providing a panel of advisers for employees to choose themselves for example.
Taking £190 out of salary for those who may be 15 years away from planned retirement is likely to be a very small price to pay for the reassurance that it may bring.
Too few organisations have put this in place and so very few employees are aware of it or are using it.
For all employers out there, please look into this and see how you can adopt and promote it more widely - it can only do good for your employees and their financial wellbeing.
For all employees out there, lobby your HR/ Reward teams asking them to implement this in your workplace.
Psst! The boss can save you up to £310 on pensions adviceA new voucher scheme can slash your costs but take-up has been low Ruth Emery January 14 2018, 12:01am, The Sunday Times Employees are missing out on a valuable tax perk that cuts the cost of financial advice by up to £310 a year. Launched last November, pension advice vouchers are a government initiative similar to childcare vouchers and the cycle to work scheme. But they have gone largely unnoticed, with few companies offering the benefit to workers. Staff are entitled to swap up to £500 of their pay each tax year for a pension advice voucher through a salary sacrifice scheme. The voucher can be used to obtain financial advice about any sort of pension the employee has; it does not have to be about their company scheme.