The financial landscape is increasingly impacting retirement prospects for full-time workers in the UK.
- Nearly 40% of employees now believe they may never afford retirement, up from 33% last year.
- The 35-44 age group is particularly worried, with almost half fearing lifelong work.
- Rising living costs have led 32% to consider delaying retirement.
- 81% worry about inadequate retirement savings, and many lack workplace financial support.
The issue of retirement affordability is becoming a significant concern among UK employees. With the rising cost of living, almost 40% of full-time workers now fear they will never be able to retire, an increase from 33% just a year ago. This alarming statistic highlights the growing financial pressure faced by today’s workforce.
Individuals aged between 35 and 44 are particularly apprehensive, with nearly 46% expressing concerns about their ability to retire. This demographic has not benefited from a full working life of automatic pension enrolment and often lacks the generous defined benefit pensions available to older generations. Consequently, they may face a financial shortfall upon reaching retirement age.
The increasing cost of living has influenced nearly a third of workers to contemplate delaying their retirement, up from just over a fifth last year. Many workers believe their retirement will be less comfortable due to insufficient savings, forcing them to extend their working years to bridge the financial gap.
With 41% of employees feeling unsupported by their employers in navigating financial matters, there is a clear need for more robust financial education and guidance in the workplace. Alarmingly, 54% of workers might seek pension guidance from unqualified sources like family and friends, instead of consulting with their employers. Only 14% would even consider seeking help from their employers.
Jonathan Watts-Lay from WEALTH at work explains that younger workers may struggle with retirement savings as they have missed out on years of contributions before automatic enrolment was introduced. He highlights the significant impact of even small increases in pension contributions, especially when employers match them. He underscores the importance of financial planning and seeking professional advice, advising individuals to consolidate pensions and track all financial assets for a clear retirement strategy.
Watts-Lay stresses the importance of understanding retirement needs through benchmarks provided by entities like the Pensions and Lifetime Savings Association. He suggests that those worried about their savings might consider part-time work post-retirement to supplement their pensions, taking advantage of additional contributions and tax relief. He points out the necessity for employers to offer financial education and guidance, encouraging them to work with reputable providers to enhance employees’ financial literacy.
The growing concerns over retirement affordability underline the need for enhanced financial planning and education for workers.
