Some 35% of employees are worried they won’t be able to afford to retire, increasing to 41% for over 55s, a report by Close Brothers Asset Management has found.
The report titled Spotlight on UK financial wellbeing has revealed that for many employees decisions around retirement are laden with confusion, indecision and anxiety and this negatively impacts businesses.
With the pandemic fueling greater insecurity around retirement as 18% of employees and 32% of those aged over 55 have deferred their retirement date since then.
Affordability of retirement
Not being able to afford to retire is one of the most common financial concerns with 35% of employees saying it’s front of mind.
As 25% admit their retirement plans are not on track while 10% say they have no plans at all.
Recruitment and talent development
The report also revealed that companies are also experiencing difficulties in recruitment and talent development (30%) because there isn’t the turnover of senior personnel necessary to incentivise young, talented staff members.
Disconnect between employees and employers
Close Brothers suggests that the heart of the problem is a disconnect between what employees want and need to plan for retirement and what’s being provided by companies.
Some 43% of employees want pension advice but only a small number of firms offer.
Just 17% offer financial advice with a financial education provider and just 16% give pre-retirement seminars.
To read more on this topic, visit: Future of IFA industry rests on ability to recruit and retain staff
Jeanette Makings, head of workplace financial wellbeing, commented: “Our report shows that anxiety has increased significantly when it comes to retirement decisions. It’s a weighty responsibility and the impact of getting it wrong is immense; it’s understandable people are feeling the pressure. And now, with the possibility of a one pot pension, and yet more control being put into the hands of employees, the need for support, guidance and advice has never been more critical.”