All our workplace pension schemes allow employees to choose where their pension is invested. As well as a default investment fund, they can choose to self-select a different investment fund depending on the level of risk and their personal preferences. This can include investing sustainably. For those employees looking to self-select, they can view the full investment list.
If your employees need help deciding what steps to take, they should seek financial advice. There may be a charge for financial advice. If they don't have a financial adviser, they can find one in their area by visiting moneyhelper.org.uk/choosing-a-financial-adviser, or they can find out more about advice services supported by Aegon by visiting aegon.co.uk/origen.
Origen Financial Services Ltd is wholly owned by Aegon UK plc but operates independently to us.
Alternatively, they can contact Pension Wise, a service from MoneyHelper - a free and impartial government service offering guidance about pensions. This service is available online at MoneyHelper by phone on 0800 138 3944 or face to face by appointment.
How much income your employees have at retirement doesn’t just depend on how much money they save. It also matters how their money is invested and how well funds perform over time. This can vary depending on the investments chosen, the amount invested, and their appeitite to risk.
The value of an investment can fall as well as rise and isn’t guaranteed. The value of your employee’s pension pot when they come to take benefits may be less than has been paid in.
Supporting employees as they approach retirement
When your employees are getting closer to the time they would like to stop working or start taking pension benefits, it’s important they know what their different options are.
As a first step, your employees need to know what they already have. Their pension pot can be made up of different pension arrangements, including employer pensions, the state pension, and personal pensions.
Setting a retirement income target
The earliest you can usually access your pension is age 55 (increasing to age 57 from 6 April 2028). While most people expect to retire in their 60s, more and more workers are staying in the labour market past the State Pension age. This could mean it’s more important than ever to encourage your employees to plan for their future.
The closer your employees are to retirement, the more likely they are to know how much income they’ll need to cover regular outgoings when they stop working. Even if they have some time before retirement, it’s still useful to have an idea of what they’re aiming for.
Questions to get your employees thinking about their target retirement income could include:
- What retirement lifestyle do they want?
- What do they plan to do when they retire, who with whom, and where do they want to spend it?
- How much will they need to live on each year?
- What sources of income will they have for retirement?
- How many years do they expect to be retired?
As people tend to be living longer, they should bear this in mind, as their retirement income will need to support them for potentially 15, 20, or 30-plus years after they retire.
They can then review this income target each year – like an annual MOT on their future savings – and is particularly important as retirement approaches. This way, they make sure their savings are in line with their expectations.
Top tip: When your employees are thinking about how much they’ll need as retirement income, it’s a good idea to take inflation into consideration. As time goes on, the price of things tends to increase, so having an extra safety net in place can be useful.
Choosing how to take their pension benefits
When your employees are preparing for life after work, they’ll want to fully understand their options on how they could take their pension savings. To help with this, we offer easy-to-use online tools.
This includes our Your Retirement Planner, which provides a step-by-step guide to help your employees plan for the retirement they want. It’s a free resource that helps members see what their pension pot could be when they come to take it and how much income it could provide.
With our workplace pensions, employees have flexibility over how they access their savings to suit their lifestyle. They can choose from:
- Drawdown
- Full or partial uncrystallised funds pension lump sums (UFPLS)
- Annuity (while annuities are not currently offered through Aegon, employees can choose to use their pension savings elsewhere to buy an annuity if that better meets their retirement needs).
If employees are in any doubt about their retirement options, they can visit Pension Wise for free, impartial guidance, or they can speak to a financial adviser who can provide personalised advice for their circumstances. There may be a charge for financial advice.
Don't forget Aegon Assist
All your scheme members have access to Aegon Assist: our free telephone and email service, providing financial guidance on combining pension pots and understanding their retirement income options. Aegon Assist don’t give financial advice.