29th September 2014
A record number of UK workers are now relying on and turning to their employers for guidance on retirement planning according to new research from Baring Asset Management.
The fund manager’s study found that more and more employees are choosing their employers and now some 3.4m people, or 9%, are most likely to look to their workplace for advice, up from 7% in 2013 and 3% in 2010.
Significantly, 52% said it was their own responsibility to ensure that they fully understand the asset allocation of their pension fund, with 23% relying on their pension provider. Yet, one in eight, or 13%, said they think it is the responsibility of their employer to ensure they fully understand the asset allocation of their pension fund.
In terms of where employees are most likely to go to for advice on asset allocation for their retirement planning, the most popular choice, consistent with last year’s poll, remains an independent financial adviser (IFA) with 26% of respondents – the equivalent of 9.5m people – and up significantly from one in five, or 21%, in 2013.
Around one in seven, at 16%, however, said that they rely on family and friends, an increase from 12% in 2013, while 14% said they use their bank or building society.
Rod Aldridge, head of UK wholesale distribution at Barings, said: “It is unsurprising to see that people still rely on their employer given the significant focus on auto-enrolment over the past year. As a key ‘touch point’, our place of work is clearly becoming more relevant when it comes to financial and retirement planning.
“Connected to this, it is also very encouraging that IFAs continue to be key as the importance of independent advice remains fundamental to effective financial provision in retirement. Whether engaged by the employer or by the consumer direct, the role of the independent intermediaries should continue to grow.”
The survey also concluded that 20% of respondents said they do all their financial planning themselves, down slightly from 21% in last year’s survey. A quarter of people said they had chosen their fund allocations themselves when they last reviewed their pension plans, while circa two thirds, or 65%, either did not know whether they had chosen the funds themselves or selected the default option.
Aldridge added: “Retirement planning is so important for our future well-being and peace of mind that getting proper financial advice is paramount. It is vital that people take more responsibility for their own financial affairs while at the same time seeking the support and advice of independent professionals, whether this is via the workplace or elsewhere.”