Nearly three-quarters of UK employees believe they are facing a less comfortable retirement than their parents’ generation, according to research by professional services firm, Willis Towers Watson.
The 2015 Global Benefits Attitudes Survey found that while 60 percent of people in their 50s are unworried about their immediate or long-term finances, employees in their 30s are the most likely to be worried about both, with 1-in-5 seen as ‘struggling’.
The study of over 30,000 employees in 19 countries found that the average age at which UK employees predict they will retire is just over 65 years old. Despite this, many were pessimistic about how long their retirement savings will last. 39 percent thought their money would run out 15 years into retirement, while over half thought it would be gone within 25 years.
Minh Tran, senior consultant at Willis Towers Watson, said: “Employees overwhelmingly anticipate less wealth in their retirement, compared to their parents’ generation. Younger employees are particularly concerned about their financial situation. The immediate financial priorities facing employees in their 20s and 30s – including student debt, housing deposits and childcare costs – can make it difficult to prioritise long-term issues such as retirement savings.”
Despite concerns about current and future finances, the research found that financial satisfaction has actually increased in the last two years. In 2015, the economy had seemingly recovered from the depths of the recession with higher wages and low inflation boosting financial security. As a result, over half of UK employees were satisfied with their financial situation at that time, significantly higher than the 42 percent who answered positively in 2013.
For those with financial concerns, the impact can be damaging. 1-in-5 people said that they had financial worries that were negatively affecting their life.
The research found that financial anxiety can have an impact on people’s ability to perform at work, with 39 percent of people who are struggling with their finances admitting that it stops them doing their best at work. In addition, higher levels of absenteeism can occur if employees have financial concerns. The report found that people who are unworried about their finances reported they took an average of three absence days from work per year, whereas employees who are struggling financially are absent for an average of seven days per year.