Posted by

Lynn Graves, Head of Business Development, Scottish Widows

02 Mar 2015

It’s been two years since the introduction of auto enrolment and by the end of 2018 every employer needs to have auto enrolled all of their eligible employees.

As an employer you may think your role in helping your employees understand what these changes mean ends with your legally required letter. However, from our research we’ve found that a significant number of employees will look to their employer as a source of financial guidance, and less than one in five people are confident in their overall understanding of pensions. The Pensions Freedoms are also at our doorstep now and are likely to have muddied the water further for those about to retire.

So what does this mean for employers? Aside from your employees being uncertain about what it all means for them, you may need to add this to your list of things you need to know so you can answer employee queries, in the long run this could result in undue pressure on your time and resources.

The old proverb, ‘prevention is better than cure’ couldn’t be truer in this instance. Investing some time and energy to educate employees on the lead up to auto enrolment could have a dual benefit to you as an employer, curtailing the number of opt-outs while stemming the number of queries when staging.

And this needn’t be a taxing activity. You could tie this education in with existing activity such as mandatory training or make use of some of the tools you normally use to communicate with your employees, such as desk-dropping flyers or putting up posters, to help build awareness and understanding among your workforce.

You don’t have to be a pension’s expert and create this material yourself, there’s plenty of information and support out there for employers. With two years of auto enrolment under our belts and the Pensions Freedoms just around the corner, there is an abundance of information available for employees that could be used to redirect queries.

Your pension provider may have some materials you could use that have proved successful with larger employers, or at the very least they’re likely to provide information online of you can refer your employees to the information shared on the Pensions Regulator website.

All individuals over 55 can take up the Government Guidance Guarantee which is free, so encourage your employees who are about to retire to make use of it. The Guidance Guarantee will be offered by The Pensions Advisory Service over the phone and face to face appointments will be offered by the Citizen’s Advice Bureau.

For those who are more active in managing their savings you could signpost websites like Unbiased.co.uk who offer a search engine to locate Financial Advisers for paid for advice – something which the Guidance Guarantee can’t offer.

The key point is ensuring your workforce is supported and has the information they need upfront so they can make decisions about their retirement while easing the burden on your own in-house resources. 

All views expressed in guest blogs are that of the authors, and not of the British Chambers of Commerce.