The government service is unclear to employers trying to guide their staff
A third (32%) of employers have admitted that they are unclear on what Pension Wise entails, and how it can help their employees, according to research from Close Brothers Asset Management.
Following the Summer Budget, the access to the service has been increased, with those over 50 now able to take advantage of the free guidance provision. As Pension Wise beds in, more employees are turning to it for information about the reforms – with 19% choosing the service, ahead of 18% going to their employer for help.
Despite this growing popularity among employees, the research revealed that 13% of employers do not feel confident recommending Pension Wise to their staff for guidance, while 29% do not know who their staff are speaking to at all about their choices.
Meanwhile, one in five (23%) admitted they did not have the right provision in place to sufficiently support staff with financial education.
Positively, however, over a third (37%) of employers say that the reforms have encouraged them to play a greater role in financially educating their employees.
Jeanette Makings, 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.
“Directing staff to Pension Wise should not be the sum of total support that employers provide to guide staff. 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.”