Why Offer Workplace Pension Advice

Following the introduction of auto enrolment all employers now have to offer their employees a pension and over 10 million more people are now saving in a workplace pension as a result.  This has altered employee’s perspective on the value of a workplace pension as it has become more an entitlement and less a valued benefit, despite employers funding a minimum of 37.5% of the cost of workplace schemes and in many cases more.

So how can employers differentiate their offer to restore the feel-good factor that providing a good pension scheme used to give to employees before the days of compulsion? With more people saving into pensions regularly the sums invested are growing and a larger section of the workforce is becoming dependent on investment returns to determine when they can afford to retire.

This means employees now more than ever need access to quality advice regarding investment of their pensions so that they can look forward with more certainty to retirement. As an employer you cannot give advice, but you can arrange access to it. Recent studies have shown that those who take financial advice are better off as a result, that they feel less stressed about their finances and more confident about their retirement plans.

 Research undertaken by the International Longevity Centre on behalf of Royal London* shows that

  • Scheme members who took financial advice were on average £47,706 better off than those who didn’t.
  • Those who fostered ongoing relationships with a financial adviser were up to 50% better off than those who had only received advice once.
  • 90% of Employees who receive advice have higher levels of satisfaction with their employer’s pension scheme.

Aspira Employee Engagement Advice

Aspira offers its workplace pension scheme clients access to advice while building up their pension funds which provides members help with: -

  • Defining their retirement income goals and timeframe
  • Advising on an appropriate level of saving
  • Selecting suitable investment funds to meet their goals and risk tolerance
  • Keeping track of other pension savings which may be consolidated into their plan
  • Reviewing the progress, they are making on an annual basis.

This service is provided on a confidential basis as regulated advice, which means that members have the benefit of the consumer safeguards of the Financial Services and Markets Act.

Providing access to advice means that employers can ensure that their staff can make the most of their pension scheme and are better prepared for retirement and less likely to fall victim to scams.

The service can be funded by the employer using the tax free allowance which employers can offer staff each year, or employees can pay for it themselves either using salary sacrifice, which saves income tax and national insurance, or directly from their pension fund.

Pension schemes remain the most tax efficient benefit which an employer can offer their staff with no tax to pay on employer contributions, income tax relief on employee contributions and if arranged via salary sacrifice, national insurance savings for both employer and employee.

Added to this the tax free roll up of funds up to £1,073,100 per person (tax year 2020/21), the option to withdraw 25% tax free after age 55 and usually inheritance tax exempt if passed on to others on death. There is no better way for employees to set aside funds for their retirement with the help of their employer.

At Retirement Advice

For those employees who plan to retire from their workplace we offer a retirement planning service  covers all aspects  and financial  needs of retiring employees  This is provided as guidance to groups of employees who may wish to attend one of our retirement seminars or on an individual basis as regulated advice.

It considers lifestyle, health, State pensions, workplace pensions, other investments, tax planning, inheritance and care provision. This may be funded by the employer or employee or a combination of both. For larger employers in house seminars and workshops can be provided. 

To get more for your business and staff from your employer pension contributions contact your usual Aspira adviser or info@aspirafp.co.uk and we will be pleased to discuss how these services could be made available to you. Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits

Kay Ingram
Public Policy Director
January 2021

*Revisiting The Value of Financial Advice – International Longevity Centre, 2019

Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirementAccessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits. Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirementThe Financial Conduct Authority does not regulate taxation and trust advice

Please remember, no news or research item is a recommendation or advice to buy. Aspira Corporate Solutions is not responsible for accuracy and may not share the author’s views. The contents of this blog are for information purposes only and do not constitute individual advice. All information is based on our current understanding of taxation legislation and regulations. The Financial Conduct Authority does not regulate estate planning, tax advice, wills or trusts. 



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