Looking around, many of the covid restrictions we endured are still there. The Government has shifted from telling us what to do to largely leaving it up to us as to how we behave, and what personal restrictions we feel we want to continue to impose on ourselves. It seems to me that many people are still looking for guidance and support as to how they should behave with the current level of freedom, and some people are more confused than ever.

Is the same true of the pension freedoms? Have we introduced a version of freedom that hasn’t set people free at all? Or did we just shift the balance of responsibility for making decisions, and mistakes, to the member?

Personal responsibility has played an increasing role in pension provision for many years: the move from DB to DC; shifting responsibility away from the employer to the member; and enrolling employees into a pension and leaving it to them to decide whether to stay in or opt-out (Automatic Enrolment).

At least with Automatic Enrolment we have used inertia as the key driver to keep people in a pension scheme; you’re in unless you tell us you want to be out.

But have we really done members any favours by introducing inertia as the norm?

Automatic Enrolment allows members to go through their pension journey without the need to make any decisions at all. Of course, we hope they do make some decisions, particularly increasing their level of contribution to deliver the retirement outcome they desire, but many do not.

And then, once the member reaches their retirement, we expect them to make probably the biggest decision of their lives – how they wish to take their benefits.  It’s at this point that the member probably needs most pro-active support, but, in many instances, it’s in short supply.

Introducing pension freedoms was a good thing, BUT (and it’s a big but) without putting a robust support structure around them, have we just set people free to make mistakes?

Of course, there’s PensionWise, and for some members, one session with them may be enough. However, for many members who are faced with complicated choices more guidance and advice could be critical.

My neighbour recently retired from a large company pension scheme and was offered very little help beyond being told to contact the administrator of the scheme who sent him a pdf in answer to every question he asked. He felt confused and abandoned at a time when he should have been looking forward to the longest holiday of his life. Surely, this should not be allowed to happen.

Confidence is generally low when it comes to making decisions about pensions, and members are fearful of getting it wrong. At retirement decisions are not the ones to be getting wrong, but we also know that many people are put off from using IFAs due to the costs involved. Some schemes offer advice at retirement, but many do not. Pension freedoms are therefore an uneven landscape that members have to navigate.

So, how can we get people retirement ready?

It is crucial that we prepare members to be able to make the right retirement decisions for them when the time comes. This means preparing them well in advance of those decisions needing to be made.

Good information and education from mid-career is a key element in helping members understand what their options are likely to be. Effective communication is critical to ensure that members know what they need to think about, and when. If we are to get members retirement ready and confident to make the decisions that are right for them, the process needs to start much earlier than it seems to currently, with a greater level of support around it.

We also need to ensure that members are sign-posted to key information at critical points in their career. We have access to data that tells us when members reach critical milestones, and we should use this to deliver targeted messages to them, personalising their journey for them.

Freedom can be liberating, but we will only achieve real freedom when we give people the knowledge, support and confidence they need to carefully exercise that freedom.

Karen Bolan, Director Retirement Communications at Gallagher Communications