Over half of British workers (53%) admit they need to save much more for their retirement, new research has found. The Global Benefits Attitudes Survey from leading professional services company, Towers Watson, surveyed over 2,000 UK employees, and reveals that over three-quarters (78%) of UK employees are concerned they aren’t saving as much as they should be in general. Consequently, almost one in four (23%) expect to work to age 70 or above – a ten per cent increase from 2010.
Many UK workers (58%) aren’t confident they will be able to afford a long retirement of around 25 years, and only a third (36%) expect to be better off in retirement than their parents. Almost half (46%) report that retirement security has become a bigger issue in the last few years, and as a result of worrying about their financial situation, over half (52%) have simplified their lifestyle and cut back on spending in recent years.
Whilst many people (34%) recognise that they need to save for retirement as one of their top financial priorities, managing day-to-day household costs is still the number one concern for the majority (57%) of employees. In an attempt to make up for the shortfall in savings, employees are expecting to significantly extend their working life beyond the age of 65.
John Ball, head of UK pensions at Towers Watson, said: “Many workers recognise the need to save more but their ability to do so seems constrained. Our research highlights that retirement security is becoming an increasingly important issue for most employees, especially those approaching retirement. Whilst individuals need to manage their own financial wellbeing, most employees (71%) rely on their employer’s pension plan as their primary way to save for their retirement. And we know from our research into the challenges of an ageing workforce that 61 per cent of employers are concerned about the reputational risk of workers reaching old age and not being able to retire. Employers do believe they have a role in enabling their staff to retire but that’s not quite the same thing as ensuring their staff will be able to.”
A way in which many employees are taking control of their financial future is by embracing web and mobile apps to manage their finances and retirement savings. In the survey, around one in seven (14%) employees said they use mobile apps or websites to track their retirement savings, while nearly one in six (15%) use these to get guidance on improving their financial situation.
John Ball added: “It’s great to see employees recognise that there are tools available to help them plan ahead.
“In his 2014 Budget, the Chancellor announced new requirements for employers to provide free and impartial face-to-face guidance for all defined contributions (DC) retirees. Whilst many large companies already provide some at-retirement help, the best value to pension scheme members will be if the guidance helps them take a complete view of their retirement income planning.”