Industry research has revealed an increase in the level of support being made available to members amid ongoing concerns from pension scheme trustees, with 94 per cent worried that members approaching retirement will be targeted by scammers.

The survey, from the Pensions Management Institute (PMI) and Wealth at Work, revealed that 89 per cent of trustees are worried that members may not understand the tax implications of accessing their pension.

Concerns were also raised around pensions knowledge, with 80 per cent of trustees worried about their members’ lack of understanding of the risks they face when transferring out of a defined benefit (DB) scheme.

In addition to this, 70 per cent stated that they are worried about a lack of engagement with members at retirement, and 60 per cent stated that they are apprehensive that members’ money will run out too soon in retirement.

Wealth at Work director, Jonathan Watts-Lay, warned that there are many risks around accessing pensions which have become “increasingly complex and uncertain”, highlighting the findings as demonstration that trustees recognise this situation and "have great concerns for their members at retirement".

Indeed, the research also showed that support from trustees is on the rise, with almost half (49 per cent) providing financial education for their members at retirement, representing a 14 percentage point increase compared to 2019, when 35 per cent of trustees said that they provide financial education.

Furthermore, 46 per cent of trustees now provide or facilitate financial guidance for members at retirement, an 18 percentage point increase from the 28 per cent that did so in 2019.

Nearly a third (30 per cent) of trustees are providing or facilitating regulated advice for their members’ at retirement, a rise of 9 percentage points from the 21 per cent seen in 2019.

Commenting on this increasing support, Watts-Lay added: “Many members lack the resources to realise the multiple risks around accessing their pensions which the pandemic has glaringly put into focus.

“It’s therefore really encouraging to see that more trustees are now putting financial education, guidance and regulated financial advice in place to help their members understand their retirement income options, as this support is needed now more than ever.

“Carrying out due diligence on providers can make the process far more robust. This should include checking that any financial education and guidance providers are workplace specialists with experience in providing support to members.

“This will help members understand key issues at retirement such as tax implications, risks around DB transfers and how to spot a pension scam.

"Due diligence on regulated advice firms should cover areas such as the qualifications of advisers, the regulatory record of the firm, compliance processes (e.g. compliance checks of 100 per cent of cases), pricing structure and experience of working with employers and trustees.

“Ultimately, empowering members by providing them with access to appropriate support can help them become more financially resilient and should lead to better outcomes for all.”

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