Why pensions should be at the top of everyone’s saving priorities
Financial experts are warning against employees opting out of their workplace pension schemes. With a threat on the pension triple lock, and the State Pension Age increasing, the importance of investing in pensions as soon as possible is higher than ever.
Our Wealth Management team want to see the number of people enrolled into pensions schemes at an all time high across the region to build better financial futures for all and are advocating for businesses to educate their teams on the importance of contributing to pension funds.
When auto-enrolment into workplace pensions came into place in 2012, it helped increase the proportion of employees with workplace pensions from 47% in 2012 to an average of 77% in 2019. This is still a reach away from everyone having the retirement protection they need, but our team have demonstrated that education on pensions can boost these numbers, with 99% of the team enrolled.
Mark Parkinson, our Wealth Management Partner, said:
“We hold regular presentations to new members of staff to explain how the pension scheme works and how the premiums are invested. They also know that if they want to have more detailed discussions on their pension or any other area of financial advice, they can simply ask to speak to an advisor from our dedicated Wealth Management Team.”
Get independent financial advice
Our Wealth Management team has long been aware that many younger professionals believe they have better things to spend money on than retirement, but getting independent financial advice, even at a young age, could increase their chances of meeting their financial and retirement goals earlier in life and the cost of the advice would be worth the outlay.
Louise Bradford, Managing Director of Creo Communications, began to make serious investment in her future thanks to advice from Leonard Birnie in our Wealth Management team.
“Retirement planning probably wasn’t on my radar until I became a mum. It was this life-changing moment that meant I suddenly started thinking more seriously about the future for all the family. With Leonard being a similar age as me he had a real understanding of where I was in life and where I wanted to be.
I now understand more about the options I have when investing money, so that I can do it in a confident way. I have a pension, ISA and a savings account for my son, but I also have properties that are rented out and I hope they will help me when it comes to retirement. Until my conversation with Leonard, I hadn’t really planned for retirement, and he made me realise the importance of not solely relying on one area of my portfolio.
Leonard helped me to create a lifestyle plan which fits in with my future goals and milestones, giving me more security for the future, and more confidence about what I will be able to achieve.”
Planning for retirement
While getting everyone enrolled in pensions schemes is vital work, there are other ways that professionals can plan for their retirement.
“Automatic enrolment, whilst a great thing for getting staff saving into a workplace pension, does remove the need for employees to be given any detailed information regarding the scheme prior to joining. As a result most employees won’t be aware that they can choose their own pension investments if they wish.
It is also vital to explain to employees where pensions fit in their overall financial plan. Saving for short- and medium-term goals, such as a deposit on a house and any necessary insurance policies need to be addressed before seeing what is left in the budget to potentially pay into a pension where the money is not accessible until later life.
The cost of living for most people will increase massively over their lifetime should they get married and have children for example. As costs increase, it can often get harder to catch up on pension saving if you have continued to put it off in your younger years. Businesses can go a long way to helping their staff by offering access to advice, whether that be directly from other employees in their organisation, or from third party financial advisors.”
With taxes set to hike in January 2022, financial planning will no doubt be an increasing priority for young professionals, signaling a busy time for financial advisors across the region.
For further pensions advice, please contact us at firstname.lastname@example.org.