More than half of bosses offer access to financial adviser

More than half of bosses offer access to financial adviser

Some 60 per cent of companies with a strategy for employer engagement with pensions offer their workers access to a financial adviser, according to research from Aegon and the Confederation of British Industry.

The survey, which polled 189 individuals from a mix of small to large businesses and across all industry sectors, found pensions are part of an employee’s induction process in 63 per cent of these companies.

Some 54 per cent also sign-post staff to publicly available pension guidance, it added.

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According to Paul Bucksey, managing director at Aegon Workplace Investing, there is a “strong demand for independent advice”.

He said: “More employers are thinking of getting financial advisers to come in and talk to their staff.”

Employees can choose adviser charging, where the IFA is paid from a particular pension if they are going to provide advice on that pot.

The government also introduced recently an advice allowance, which allows savers to pay for pension advice by accessing three instalments of £500 each of their retirement savings.

However Aegon doesn’t have data on how many employers are offering the employer sponsored advice allowance, but believes few are using it and thinks some are not even aware of the option.

Mr Bucksey called on the government to increase the allowance to £750 to encourage higher take up.

“This is unlikely to be enough to cover advice costs, so we would like to see this increased to £750 at least to encourage more employers to take advantage of it so more employees can benefit from advice.

“It would be good to see government highlight this benefit to more employers as many employers we speak to are not aware of it.”

Overall, companies responding to the survey recognised that more needs to be done in this area, since only 12 per cent of respondents happy with current levels of employee engagement with pensions.

Although nearly half of businesses (47 per cent) believe that pension freedoms have led to employees being more engaged, there remain major gaps by age, income and employment status/length of service.

According to the survey, those aged 50+ are almost twice as likely as (87 per cent) those under 34 (48 per cent) to be engaged with their pension.

The research also concluded that 92 per cent of firms are contributing above the statutory minimum level requirement for auto-enrolment schemes, currently 1 per cent for employers and for employees.

Auto-enrolment minimum contributions will rise next April from the current 2 per cent to 5 per cent.

One year later, it will increase again to 8 per cent.

There are now more than nine million people auto-enrolled in a workplace pension scheme.