Annual initiative puts the focus on talking about money
LONDON, 11 November 2020 – Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, is encouraging pension savers, regardless of their age or financial situation, to consider their financial position during this year’s national ‘Talk Money Week’ from 9 to 13 November, the Money & Pensions Service (MAPS) annual campaign to get the UK talking about money.
Matthew Arends, partner and head of UK Retirement Policy at Aon, said:
“The effects of the pandemic continue to bring numerous challenges and changes to work and life in general, especially with the second lockdown. But Talk Money Week is a timely opportunity to urge everyone to review their financial position, whatever their age and whatever the state of their personal finances.
“Over the last nine months, many people have seen their incomes slashed through losing their job, by being furloughed or by pay reductions. Some may well be thinking of stopping or reducing their contributions to pensions and other savings and this may be the right thing to do, in order to concentrate on meeting day-to-day expenses or paying down debt. However, if reduced saving becomes sustained, this will begin to affect retirement outcomes.
“Other individuals might be in the fortunate position where their gross pay level has stayed the same but, for example, they are not paying to commute and so may see their disposable income rise in 2020. For them, this is the opportunity to get ahead on their retirement plans by saving more.”
There has also been evidence this year of pension schemes’ willingness to support members in these challenging times. Aon’s 2020 Member Options Survey showed that around a third of UK pension schemes had already provided members with online modelling tools and/or access to independent financial advice at the point of retirement - or shortly plan to. Polling during an Aon webinar on member options earlier this year demonstrated that schemes started to respond to member needs during the novel coronavirus (COVID-19) crisis by reviewing the support they provide to members, with the aim of ensuring they are making fully informed decisions about their retirement benefits.
To support employers in their efforts to help defined contribution (DC) members manage their finances, the Aon MasterTrust implemented its integrated pension and wider financial management tool Well One Money, in June this year. This aims to tackle the issue of financial stress by offering members an innovative way to keep track of their overall finances and to plan more effectively for their retirement.
Karina Klimaszewski, principal DC consultant at Aon, said: “These days, employees increasingly expect and trust their employer to help them with managing their day-to-day financial needs, especially those related to pension saving. Talk Money Week is also a reminder for pension schemes to ensure that their member communications are clear and respond to the current environment when many employees are unfortunately quite likely to experience at least some level of financial stress.
“Given social distancing, people are increasingly managing their finances digitally. There is an opportunity for pension schemes to prioritise solutions which provide employees with a holistic overview of all their finances - not just pension savings - thus allowing them to manage both their near- and long-term finances.”
This unsettled period has also raised concerns over the increased possibility of pension scheme fraud. During the first wave of the pandemic, the Pensions Regulator warned about the heightened risk of members being targeted by pension scams and urged trustees to provide additional warnings alongside transfer value quotations in order to ensure that members make good decisions. The Aon webinar poll from earlier this year, referenced above, showed that as a result of the pandemic, 19% of schemes planned to improve the support available to members and, in particular, help them to deal with the increased possibility of fraud.
Matthew Arends added:
“This is also a good time to remind members to be vigilant of fraudulent activity concerning all their finances, including their pension savings. It’s encouraging that we have seen examples this year of pension schemes acknowledging this issue and increasing their communication with members and staying in touch with potentially vulnerable members at a time when it’s really needed.”
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
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