Corliss adds: “The challenge is to encourage employers to offer the best schemes possible and for employees to make the most of them. Explaining the benefits of compounding, employer contributions, tax relief and how starting earlier means that smaller amounts need to be paid, is important.
“Employee benefit and financial wellness portals within workplace pension offerings are also a great way to help younger people engage with financial planning, including pension planning.”
It is not just young people that face retirement challenges. Pension disparities between men and women continue to exist for a variety of reasons.
Women's pensions are typically significantly smaller than men's due to career breaks, gender pay gaps, and often more conservative investment strategies.
James Murray says: “There is only one element of these that current pensioners can control: investment strategies.”
Statistics from the Department for Work and Pensions state that in private pensions men hold 35 per cent more in their pensions than women.
Evelyn Partners' Spencer says she frequently advises women if they have capacity to do so to top up their pensions, both through maximising employer contributions, their own personal contributions as well as ensuring that their state pensions national insurance contributions are up to date.
“Then work with them to manage the funds effectively to ensure that the growth potential and risk is right for them over this time period,” she adds.
“There is also an education piece to be done around pensions with both men and women, as with the numerous legislation changes they can be quite challenging to understand and therefore people do not pay into them.”
Corliss says greater awareness of the challenges faced by women, could help advisers devise strategies to mitigate this known issue through alterations to pension accumulation strategies.
He adds: “Those wondering whether they have a sufficient level of pension savings could use the PLSA Retirement Living Standards, which outline the likely income needed for a minimum, moderate or comfortable retirement lifestyle, for singles or couples, living inside or outside London.
"From here it may be possible to determine if someone’s state pension income plus private pension income is sufficient to meet the income needed at each level.”
Additionally, it is worth considering pension sharing on divorce. A pension pot can often be the most valuable asset in a financial settlement, often of greater value than the family home, and dividing them equally can be complex and challenging.
“However, pensions are too often overlooked in the divorce settlement. Financial advisers have a vital role to play with divorcing couples, to ensure this valuable asset is included. It won’t always result in a pension sharing order but will be important when offsetting one asset against another,” Corliss adds.
