Retirement security has become a more important issue to over two thirds (67%) of UK employees over the last two or three years according to research published by LifeSight, Willis Towers Watson’s UK DC Master Trust. Yet retirement saving is only seventh in a ranking of employees’ financial concerns, with general household costs, general savings, housing costs and leisure considered the top priorities.
The Retirement Expectations research* also found that over two-thirds (69%) of respondents say that their workplace pension plan is the main way they are saving for retirement. With long-term financial worries rising from 46% in 2015 to 52% now and retirement confidence 15 years into retirement declining from 61% to 55%, it is clear that retirement security is a growing challenge.
David Bird, Head of Proposition Development at LifeSight, said: “Our research clearly indicates that employees are looking for their employers to take the lead with their retirement savings, using their workplace pension as their main means of saving. Even though this adds increased pressure on employers, making sure they are communicating effectively with their employees about the options available to them and the importance of long-term savings is a must. It is also an opportunity not just to ensure that workers are getting an engaging member experience that encourages them to save, but to turn this into a competitive differentiator for their business.”
The research also found that employees are not prioritising saving for retirement until their 40s or 50s, when other financial needs have been met.
Bird continues: “As the younger generations are set to be in work longer than their predecessors, starting to save from an early age is extremely beneficial. For millennials especially, short-term goals are much more important than long-term savings and so employers have the added difficulty of communicating the importance of retirement savings to them. One way to do this is through gamification, where the risk and rewards associated with long-term savings can be made easily accessible. By highlighting the importance of pension savings and implementing strategies to encourage it, businesses can help millennials – and employees in general – avoid financial difficulty in retirement.”