Retirement support a fast-growing priority for employers, research finds

Businesses increasingly providing financial wellbeing help for over 55s, as one in 10 working adults withdraw pension savings early

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The number of employers planning to offer employees over 55 targeted financial wellbeing support has increased by 159 per cent compared to two years ago, research by the Reward and Employee Benefits Association in association with Wealth at work revealed.

The research, based on responses from 195 wellbeing, HR and employee benefits specialists, found that 44 per cent planned to offer financial wellbeing support for this age group in the next two years.

This compares to 17 per cent that offered targeted support for the over 55s in the past two years, indicating the rapid rise in prioritisation of this age category by employers. 

In addition, the research found that nearly a third (29 per cent) of employers thought the ageing workforce would be a driver of change to their financial wellbeing strategy over the next two years – a rise from 11 per cent over the past two years.

One in six (17 per cent) said the over 55s accessing their pensions early was causing them to adapt their financial wellbeing strategy for the next two years, compared to 11 per cent in the previous two years.

Stuart Lewis, chief executive of Rest Less, told People Management: “With nearly a third of the UK’s workforce over the age of 50, age-inclusive policies should be an essential part of all employee benefit packages.

“More employers than ever before have an understanding of the huge value this demographic brings to a team, but many organisations have work to do to ensure this portion of their workforce is supported in the same way as other age groups.”

The research follows a Wealth at work survey published earlier this year, which found one in 10 (10 per cent) working adults have withdrawn their pension savings early.

A further 31 per cent said they intended to do the same, or would consider it in the future, the survey revealed.

In addition, the vast majority (83 per cent) of workers said they were concerned they would have to work longer before retiring because of the cost of living crisis, while a third (33 per cent) thought they would never be able to afford to retire. 

“Financial education is essential for all, but especially those approaching retirement. There needs to be a realisation that, although you can access your pension pot from age 55, it doesn’t mean you should,” said Steve Watson, director of policy and research at Cushon.

He explained that employees should have the “knowledge and understanding” to make the correct decision. “The concern is that employees might be taking their tax-free cash because they can, rather than having a plan of what they are going to do with it. Also, accessing too early can mean people struggling financially later on in life,” he said.

Jonathan Watts-Lay, director at Wealth at work, told People Management it was important employees were supported in planning for retirement: “Often individuals have spent most of their working life saving into their pensions, which may need to last more than 30 years. It is important that employees can make informed decisions based on what is right for them.

“Many employers are now seeing the benefits of putting robust processes in place to support their employees at retirement. This includes offering services such as financial education seminars and one-to-one financial guidance or financial coaching, in the months or even years before retirement.”

Watts-Lay also suggested employers facilitate an introduction to “a regulated financial advice firm that has been through a thorough due diligence process”.

These findings follow the government’s increased emphasis on getting the over 50s back to work, with £70m invested in support for this age category as part of the spring budget earlier this year.