One third (31 per cent) of UK employees aged 55 and over expect they will need to work part-time in their retirement to make ends meet, research has revealed, prompting experts to urge employers to ensure their workforce is adequately preparing for the future.
The survey found a third (36 per cent) of all employees reported feeling unprepared for retirement, with women more likely than their male counterparts to say they were struggling (48 per cent of all female employees surveyed versus 25 per cent of men).
Out of 5,000 UK employees questioned for the Close Brothers Financial Wellbeing Index, almost one third (31 per cent) said funding their retirement was one of their top three financial worries.
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In addition, 16 per cent of all employees expected to rely on an inheritance to supply their retirement fund.
Jeanette Makings, head of financial education at Close Brothers, said it was concerning that so many employees felt anxious and unprepared for retirement.
“This not only impacts their own financial health but also has a knock on effect on the workplace, with people deferring retirement, increased people costs and blocked succession pathways,” she said.
“To support individuals in feeling able to retire when they want, organisations can engage all staff with planning for retirement throughout their career, not just in the final countdown years.”
Professor Sir Cary Cooper, CIPD chief executive and a leading expert in workplace wellbeing at the Alliance Manchester Business School, agreed the report proved it was critical employees begin planning for their retirement early.
“Reviewing how much you are saving into your pension a few times a year can go a long way,” he said. “When you keep track and know how much you are putting away, you can make the necessary changes and feel more relaxed and confident about approaching retirement.”
According to the findings, more than half of respondents (55 per cent) admitted they did not have a financial plan to achieve their future goals.
This was exacerbated by a lack of engagement in later life finances: a quarter (24 per cent) of employees surveyed admitted they never checked on the amount in their pension pot.
Makings added that with pension freedoms and reduced lifetime and annual allowances, pensions were no longer the only solution to save for a secure retirement, but emphasised they were still “the bedrock and most significant option for most employees”.
She added: “It’s imperative that employees understand their pension and the importance of saving for retirement throughout their life, not just when approaching retirement. Regular monitoring, education and engagement helps develop the tools needed to take control, as well as helping guide the workforce to make informed choices.
“This is just as vital for employees joining their first workplace, as it is for those at the point of retirement.”