New research predicts 6 million UK employees will work well into their eighties
While 86% of British adults would like to retire at or before 65, only 37% believe this is financially feasible. In fact, 20% of the UK population don’t believe they will ever be able to retire.
Retirement dreams will remain just that due to poor financial planning, the ‘Working Late’ report from Wealth Wizards identified. More than half (56%) of respondents wish they had contributed more to their pension when they were younger and for those in the 18-34 age group, 45% are already concerned about their lack of pension savings despite retirement being decades away.
Phil Blows from Wealth Wizards says “The reality is that two-thirds of the working population will be unable to retire at 65 due to insufficient pension savings. The UK is already faced with an ageing workforce where workers aged over 64 have doubled in the past twenty years. It is important that employers and the government work together to ensure employees are provided with cost-effective and accessible advice and support to help them plan for their retirement. The good news is that it’s not too late for people to benefit from professional expert advice in order to alleviate their stress and concerns about their financial future. The key for employees is to act now and explore potential advice solutions with employers.”
Younger workers expect their employers to provide more assistance in planning for their retirement, with 59% stating this while 49% of employees over 55 believe employers should do more to ensure financial stability at retirement.
While employees may be concerned about the prospect of delayed retirement, almost half of employers (45%) said they would willingly embrace their employees working into their eighties. The majority of employers surveyed did not think an ageing workforce would impact productivity in their workforce. A third of employers in the manufacturing industry believe an aging workforce will actually increase productivity.
There are drawbacks to an aging workforce that employers may be overlooking due to the value they bring through skills and experience. Higher costs due to employee benefits, fewer opportunities for younger workers and a potential increase in sick days could lead to 1.7 million days of lost work per year. This doesn’t even account for the cost that a one-year delay in retirement will cost employers in wage costs which is predicted to up to £7.4 bn according to the report.
Currently, only 24% of employees are offered financial education by UK employers. The UK should be the trailblazers in Europe with at least 80% of employers offering financial advice as part of an employer’s everyday commitment to their staff. Once considered the domain of the High Net Worth Individual, quality, highly regulated and professional financial advice is now available to employees across the UK courtesy of online financial advisers that utilise the latest in digital technologies to deliver regulated, professional quality advice.
“We’re committed to improving the financial wellbeing of the nation’s workforce. It is our collective responsibility to ensure that as many of the 86% who want to retire at or before 65 are given this chance.” Blows adds “Where companies have offered financial advice, there have been positive results such as Intercontinental Hotels Group 68% of employees within a target group increased their pension contribution by an average of more than 100%.”