Two-thirds of UK employees want employers to help them plan for retirement

By Katie Scott

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Oct 17, 2018
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Around two-thirds (64%) of UK employees, and 51% of staff approaching retirement, want their employer to help them plan for retirement, according to research by financial services organisation State Street Global Advisors (SSGA).

Its Global retirement reality report 2018, which surveyed 9,451 individuals across eight countries, including 1,603 people in the UK, also found that 80% of UK-based respondents would like their employers to help make them aware of the available retirement options they have, while 60% want their employer to provide a consultation or advice.

Nigel Aston, global head of strategy and proposition at SSGA, said: “As is the case with happiness more generally, there is not one driver, but several elements that combine to enable a happy and secure retirement. By observing retirement realities through the eyes of the individual saver, we are working to truly understand people’s experiences with state and institutional structures globally. By doing so, we can offer solutions that are as multidimensional as the needs of the people, plans and policies involved. Happiness is important and evolving as our lives evolve.”

Of the UK respondents who had retired within the last five years, 35% received help and advice from their employer during the planning stages, compared to 37% of respondents who retired more than five years ago.

The majority (81%) of UK respondents who are currently working and do not plan to retire within the next five years expect their employer to make them aware of the options they will have in retirement, while 65% expect their organisation to provide a consultation and advice. Under half (42%) of these respondents also expect their employer to recommend a solution that is specific to their needs, and 20% want their employer to provide a solution for them.

Over half (61%) of the surveyed working population in the UK are not optimistic or happy about their financial situation in retirement, and 46% feel their current pension savings are not close at all to what they need by the time they retire; this compares to 34% of UK respondents who are currently working but plan to retire in the next five years, who believe they are somewhat close to having their pension savings matching what they need by the time they retire. However, only 6% of those approaching retirement think they are extremely close to having what they need.

More than two-fifths (49%) of UK respondents approaching retirement plan to make up the difference between their retirement savings and the income they wanted to save by the time they retire by doing part-time work; 27% intend to retire later, a further 27% will use other savings and 11% plan to use inheritance money. Over a quarter (27%) intend to bridge the savings gap by downsizing or releasing equity from their home and 7% think they will use buy-to-let or rental income.

In the US, 40% of respondents approaching retirement think they will retire later to make up the shortfall between retirement savings and expected spending. This compares to 43% in Australia, 25% in Germany, 26% in Italy, 23% in the Netherlands and 25% in Ireland.

Globally, those approaching retirement tend to agree that part-time work will help to bolster their retirement savings. In the US, 61% of those approaching retirement believe this is the route they will take, compared to 57% of those based in Germany, 30% in Italy, 35% in the Netherlands, 35% in Sweden, 50% in Ireland and 45% in Australia.

A quarter (24%) of UK respondents who are currently working, and the same number again of those approaching retirement, have consulted their current employer for advice regarding their pension and retirement. Around half (48% and 49% respectively) have turned to an independent financial adviser. The majority (81%) of employees surveyed in the UK agree that they would value a solution from their employer that would provide a predictable income.

Alistair Byrne, head of pensions and retirement strategy at SSGA, added: “From these findings, we hope to have arrived at a blueprint for a successful retirement structure that combines effective practices and rewarding retirement experiences, gathered from around the world. With this study, we are looking to identify the factors across a number of retirement systems that drive retirement happiness, which can become best practices that are applied as retirement systems shift to have increased reliance on the defined contribution model.”

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