Most FTSE 100 employers already offer retirement guidance while FTSE 250 companies are less likely to offer support, Towers Watson has found.

The Chancellor announced in his Budget that pension providers and trustees are to offer members 'free and impartial face-to-face guidance' on choices for defined contribution (DC) pots at the point of retirement.

Although this will represent a "significant break from the past", Towers Watson said that three quarters of FTSE 100 employers offer annuity broking services to help retirees shop around for competitive rate.

According to Tower Watson's latest FTSE 350 DC Pensions survey, around 43% issue 'countdown to retirement' guides, and a third offer pre-retirement counselling sessions.

Will Aitken, Towers Watson senior DC consultant, said: "Calling guidance 'free' will not make it free to provide. The costs will have to be picked up either by employers, by taxpayers, or by savers through the charges they pay. However, this is not as onerous as it sounds because not all schemes will be coming at this from a standing start.

"Where annuity broking or pre-retirement counselling is already on offer, substituting the new guidance might not always add to costs. In some cases, it could even be cheaper, but a lot will depend on how the requirements around guidance are designed.

"While the government appears to be open minded on some of the details, it wants to ensure that any guidance is free, personalised to the individual and conducted face-to-face."

First published 10.04.2014

monique_simpson@wilmington.co.uk