As the ongoing response of the Government and UK financial institutions to help the vulnerable start to wind to a close, and taxation starts to rise to pay for measures such as the furlough scheme and increasing social care bills, a growing number of UK workers are feeling the pinch.

Despite increasing financial difficulties faced by many workplace pension members, our data shows that the vast majority of workplace pension providers still do not provide access to debt management tools or support for their members.

In our latest insight we explore what debt management tools and services are offered by workplace pension providers.

Our data shows that currently only one workplace pension provider offers a suite of specific debt management tools to their scheme members. The Mercer Master Trust offerings, from both Aviva and Scottish Widows are the only pension propositions to incorporate a series of member debt management tools. They currently provide:

  • Help with setting up an Individual Voluntary Arrangement(IVA)
  • Debt Management plans
  • The ability to record and list debt in the tool/portal (Mercer Money)
  • View the balance of their debts against their assets (Mercer Money)

True Potential who also utilise Open Banking can also list member debts within the portal/tool.

No workplace pension provider debt management tools currently offer bankruptcy declaration assistance, or any form of debt counselling for debt consolidation. That later, which could be very valuable to many might be addresses by some financial advisers.

When it comes to incorporating personal banking details, both provider tools from Mercer and True Potential offer a broad range including current accounts, savings accounts, ISA, GIA, pension, loans and credit agreements. Interesting, whilst only two providers offer debt management tools, a wider number offer educational literature regarding debt management.

This educational literature is provided by all providers via their online portals. Other than for Hargreaves Lansdown, it is also provided via the member application and/or mobile device.

Only Legal & General and Legal & General Master Trust work with a third party debt management company. The company they work with is the Money Advice Service but data and information cannot be passed between both parties.

Overall, our data shows that sadly a very low percentage of workplace pension providers offer debt management tools, despite them becoming increasingly useful to large numbers of UK workers who have found themselves in financial distress due to the impact of the Coronavirus pandemic.

Those who offer the least in terms of debt management are Aegon Master Trust, Aegon Workplace ARC, Aviva Designer, Aviva My Money, Aviva My Money Master Trust, and Cushon who do not offer any debt management tools or provide any educational literature regarding debt management.