Pensions & employee benefits roundup - March 2017

Gareth Davies, 07 March 2017

In February the ever excellent Pensions Policy Institute (PPI) released its report on consumer engagement which explored barriers and biases.

One of the areas that the PPI explored was that “people tend to value immediate benefits more highly than benefits further into the future”. Some of the examples that the PPI considered was that people would opt for a lower benefit today than a higher benefit some time in the future.

With retirement being the ultimate long term objective for many, this means that saving into a pension scheme could quite easily get kicked into the long grass. In our research report surveying UK employees, we asked what people’s financial priorities were for the next three months, year and three years. It may not be so much of a surprise to learn that over three months and 12 months, the main financial priorities were either defensive in nature (such as keeping on top of day-to-day living, becoming a smarter shopper  or paying off debts) or to save to go on holiday.

But over three years, saving for retirement was highlighted as the No. 1 financial priority. People prioritise the things they need to do right now, or things with a tangible and immediate benefit. Retirement will be some time away for most people and therefore sits far lower on the priority list for them.

And whilst it is interesting to see that people will prioritise saving for retirement in three years’ time, we do wonder whether this is a rolling three years, where saving for retirement is pushed back another three years as other priorities force their way to the top of the list.

A pension is the polar opposite of the “buy now, pay later” culture. But if people neglect to “pay now” into a pension or other long-term savings arrangement, they may be left sorely disappointed with what they have to “buy later” when they’re ready to retire…

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Throughout the month our research team keep a close eye on what is happening in the pensions and employee benefits industries. Here is a roundup of the best news articles and stories for February 2017.

How poverty affects people’s decision-making processes
Joseph Rowntree Foundation, 1 February

The report from JRF summarises the most recent evidence on the relationship between socioeconomic status and the psychological, social and cultural processes that underpin decision-making.

Consumer engagement: barriers and biases
PPI, 8 February

The Pensions Policy Institute publishes research report that explores behavioural economic theory and how barriers can inhibit decision-making and outcomes in pensions.

50% of UK adults do not understand the role of their employer or trustee in their retirement planning
Employee Benefits, 9 February

Research from LV= found a fundamental lack of understanding  among pension scheme members about their retirement options.

Employers urged to hire one million extra over-50s
CIPD, 10 February

Andy Briggs, CEO of Aviva Life and the government’s business champion for older people is encouraging employers to actively recruit older workers to avoid a drastic talent shortage with fewer younger entrants to the labour market.

A little gratitude goes a long way
Reward Guide, 10 February

Research from One4all Rewards found that 77% of workers reported that they don’t even receive a regular thank you from their boss, although 83% said that being thanked would increase their sense of loyalty to the company.

Pension funds should be subject to governance code, say MPs
IPE, 13 February

The Work and Pensions Committee has called for corporate governance rules to be extended to cover large pension funds and private company boards.

48% rank PMI in their top 3 most valued benefits
Employee Benefits, 14 February

Research from Ellipse found that nearly half of employees ranked private medical insurance in the top 3 of benefits, with 37% also selecting life insurance

Phased retirement better for wellbeing
HR Magazine, 14 February

A report by What Works Centre for Wellbeing has called for greater support for older workers and for employers to offer bridging jobs and phased retirement to improve wellbeing.

How employers can support the health and wellbeing of employees on a lower income
Employee Benefits, 15 February

Ryan Hall, senior strategy consultant in the health management practice, shares his views with Employee Benefits magazine.

Better education needed to combat pension scams
Professional Pensions, 15 February

TISA has called for further educating consumers on how to spot fraudulent activity, stating this is a better form of defence than a ban on cold-calling.

One in four UK retirees burdened by unpaid mortgage or other debts
The Guardian, 17 February

Research from Prudential found that one in four people planning to retire this year will still have a mortgage or other debts to pay off and will typically owe about £24,000.

Self-employed living in La La Land when it comes to pensions
Actuarial Post, 20 February

Research from Aegon found that 75% of self-employed don’t save regularly for retirement, but 50% are optimistic about being able to choose when to retire.

42% overeat or eat unhealthily because of workplace stress
Employee Benefits, 21 February

Research from Canada Life found that 42% employee respondents overeat or eat unhealthy foods because of workplace stress and 31% in an open-plan office believe it would be frownded upon to take the full hour at lunch.

London house prices growth to slow to 0% in 2017  
Financial Reporter, 24 February

House price growth in London has fallen to 6.4%, the lowest level since June 2013, according to the latest Hometrack house price index.

Flexible retirement a mirage for millions
Financial Reporter, 27 February

Research from Royal London found that phased retirement is unlikely for millions based in current levels of saving and people won’t be able to retire until their late seventies.

British workers unaware of state pension age increases
HR Magazine, 28 February

Research from CIPD has found that 26% of over 55 year olds were not aware that he state pension age will increase from 65 to 66 between 2018 and 2020.

 

About the author

Gareth Davies Research & Engagement Manager

Gareth Davies