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Survey Report

At retirement – improving member support as retirement approaches

Chapter four of the FTSE 350 DC Pension Survey 2020

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By Anne Jones | July 13, 2020

We have seen a steady reduction in pension scheme charges which will have a positive impact for members and the value of their savings at retirement. Our results show that FTSE 350 companies are looking to review the services that are made available to members, particularly in the run up to retirement, thereby further improving member outcomes at the point of access.

The majority of schemes in our survey offer some support to members approaching retirement – this is through a combination of a bundled provider’s own proposition and the appointment of a third-party service. A notable change this year is the growth in the number of own-trust schemes offering facilitated access to a nominated third-party drawdown provider perhaps in recognition of the continued popularity of this option for retirees.

Many schemes are looking to enhance retirement journeys in the near future to help members successfully navigate the many decisions they need to make as they start to draw on their retirement savings.”

Anne Jones
Director, Retirement

Although around a third of trust-based schemes allow access to a member paid advice service, few have so far made the £500 pension advice allowance available to fund this. It would appear that many employers and trustees are therefore missing out on providing access to financial advice by taking full advantage of this tax efficient option.

It is encouraging to see that so many schemes are planning to enhance the retirement support they offer members. This appears to be the top area of focus with over 1 in 4 companies in the FTSE 350, either very likely, or extremely likely to make changes in the short term.

The FCA’s review of retirement outcomes highlighted the challenges members face in choosing their own benefits. Contract-based providers are now required to provide far more support, but we see many companies looking to supplement this even further. Many trustees are also looking at new ways to help members get the best value from their savings.

The increased use of apps to support members alongside web tools aids members in being able to access the information how they want and when they want.

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FTSE 350 DC Pension Survey 2020 PDF 1.5 MB
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Director, Retirement

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