Aon warns of 'unintended consequences' from pension campaign

Aon warns of 'unintended consequences' from pension campaign

Aon has warned the Pensions Awareness Week campaign could have “unintended consequences” due to the current cost of living crisis.

Successfully engaging people with their pensions could lead to savers being “more inclined to cease their contributions or request early access to their pension savings”, the consultancy stated.

Aon’s 2021 defined contribution and financial wellbeing survey, which polled more than 2,000 employees, showed that one in four respondents may not be able to come up with £1,000 in an emergency, while almost half do not set a budget that they follow each month.

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The research also concluded that mid-career employees are more likely not to have money left over for saving, although more than 75 percent of staff have access to financial education and planning tools.

Aon partner Karina Klimaszewski said: "Pensions Awareness Week is a tremendous initiative that highlights the vital importance of retirement saving.

“That importance is never going to go away — but some of the current financial challenges that people face should be more temporary.

“Unfortunately, in the current environment of higher inflation and its impact on the cost of living, more and more people are likely to be facing challenging financial decisions amid increased volatility.”

Klimaszewski noted that pension schemes can help “by ensuring that members have better insights on the consequences of their choices”.

She added: “We hope that this year’s Pensions Awareness Week acts as a prompt for employers and schemes to focus on signposting all the help that is available for members to help build their resilience.

“This could be a great opportunity to engage with members, directing them to tools and support that enable them to make better decisions and give them help when they really need it — and when they will value it most.”

Maria Espadinha is the editor of Pensions Expert, FTAdviser's sister publication