5.5 Things Your Employees Need to Get Right
EBC’s tips to employers as Pension Engagement Season starts
Pension Engagement Season starts with Pension Awareness Week on 10th September 2024 and continues its focus on getting us revved up about our pensions until Talk Money Week (early in November). Our very own James Biggs helped bring this to the big screen during lockdown, and shares with employers the top things employees should be focussing on:
- Get on board with your pensions plural – start with the one at work today and find your old ones. Write a list, create an excel, put it on your kitchen memoboard – but know where they all are. If in doubt, use the ‘find and combine’ options that are popping up with the major providers. If all else fails, roll your sleeves up and call the major providers (Aegon, Aviva, Legal and General, Phoenix Life, Royal London, Scottish Widows and Standard Life) and just ask – ‘am I in your system at for any pension policies?’ Have your NI number to hand;
- Once you have found them, get registered for online services. We have noticed a growing trend of pension scammers trying to impersonate you (it really isn’t hard for them to work out your work email address – hold that thought, we are coming back to it). If you haven’t registered, they may dupe the provider into believing it is you and cash in the pot (if you are over 55). The average pension scam is over £90k – so they know there is money out there. And the rule is – if it sounds too good to be true, then it is! And your pension company will never call you;
- AND – make sure you have completed a death nomination form for each one. Did you know only 1 in 4 employees has done so. Most think they have done it after completing an expression of wish for the group life assurance plan. We can’t urge this more emphatically. In the last 6 months we have had 2 unexpected deaths – in both cases there was no death nomination form on record. It just slows things down at a time when emotions are understandably running very high in the family. It is so easy to do – get the app and just do it. It must be important – even Martin Lewis is talking about it (but we got there first!);
- Consider if your investments are ‘you enough’. Most (85% to 95%) of you sit in the default fund. This exists to be the place of no resistance. It has to be decent, low cost, green as possible and medium risk – because it is where you have to be auto-enrolled. But it assumes you are average. The average employee is 42 in the UK. Why not consider more adventurous funds, especially if you are younger. I would if I had my time again!
- Pay in enough! Yes – all of you. Target 15% (combined – yours PLUS your employers). The equation for success points very much towards this being the biggest area you can make real changes happen in your pension journey. Combined with making a racier choice (see point 4) getting more into your pot earlier on will supercharge your fund. Compound growth is the 8th wonder of the world!
This article was written by James Biggs, veteran pension expert and jazz-hands engagement guru. They are his views and should not be seen as giving your employees advice. Oh, and we asked him where 5.5 comes from – that is just 5 (above). But he said he was so passionate about point 3, he said it was worth 1.5!
