Following the introduction of Freedom and Choice, the government introduced Pension Wise to provide free and impartial guidance for members of Defined Contribution schemes.
Guidance is a good way for your scheme members to improve their understanding of the options available and get answers to general questions they may have, so it’s important they are aware of the service.
What guidance doesn’t do is look at personal circumstances but it will help your scheme members understand what questions they should ask when they seek advice.
For most, advice will be a simple case of ensuring they haven’t missed anything, such as enhancements to an annuity in the event of ill health. They want to feel confident they are not making the wrong decision and want a retirement professional to ratify a decision that they are already leaning towards.
For others, with more complex circumstances, advice can be invaluable. A report issued in 2017 by Aegon showed that individuals who had taken financial advice accumulated, on average, £40,000 more in assets than those who had not.
With so much at stake, it’s easy to see why your Step 4 is crucial for your scheme members to make the most of retirement.