Reward Live: Employees need to start thinking about pensions 5-8 years ahead of retirement, says expert


Employers must begin their pensions conversations with staff five-eight years ‘ahead’ of their planned retirement date.

This was the stark message given to delegates at Reward Live from Andrew Pennie, marketing director, Intelligent Pensions, who argued a new word needs to be talked about – ‘decumulation’.

He said: “We used to talk about accumulating assets in pensions,” he said.

“Now, with drawdown options in particular, employees will need to understand how to decumulate their assets in the most appropriate manner. This includes thinking about how much they take as a taxable amount, and whether to expose the rest of their assets to risk, or at what point they may return to an annuity option.”

He said: “For those people thinking of cashing out, de-risking is totally appropriate. To those who flexible access to their funds though, de-risking would be hugely risky.”

Pennie said: “Employers have to get their employees on the right pathway at least five years out from retirement. This will require a much more personalised approach.” He added: “Employers must tackle the advice gap in people’s pre-retirement years.”