Lack of retirement saving the cause of growing anxiety for employers
Only one-in-ten employers believe their staff know how much to save for their retirement, according to a report by by Towers Watson called ‘Fit For Retirement’.
Nearly two-thirds (62%) believe so-called ‘retirement adequacy’ has become a greater issue in the last few years, but the research reveals there is considerable anxiety amongst employers who feel their staff simply aren’t changing their savings habits.
It finds nearly half (49%) of employers are worried about older workers deferring their retirement date due to having inadequate savings, while only 25% of employers think their employees know what their own company scheme provides.
Phil Percival, Towers Watson’s FiT Age programme head, said: “Employer concerns are not without foundation. Gaps in financial well-being and retirement readiness create the risk for an employer of a distracted workforce with higher costs. Affected employees may also contribute to blocked career paths, increasing the risk of losing critical talent.”
To alleviate this worry, he said employers must be more prepared to enquire about their employees’ financial wellbeing/financial situation.
“If companies want to have a good idea of when older workers will be able to retire, they need to better understand the financial circumstances of their workforce,” he said.
He added: “To help employees reach their retirement goals, employers must take responsibility for informing and educating workers early on about how to achieve the retirement income they want.”
The research also finds 74% of employers think retirement adequacy will become an even more important issue in the future.