Just over a fifth of respondents do not expect to be able to retire until they are in their seventies, according to research by Willis Towers Watson.
Its Global benefits attitudes survey, which interviewed UK-based 1,895 workers, also found that employees who expect to work for longer are less healthy, more stressed and less engaged than those who plan to retire earlier.
There’s been a lot about pensions in the employee benefits news recently, for example:
- The majority (92%) of respondents are falling behind on their retirement savings targets, according to research by Aegon UK.
- More than three-quarters (77%) of respondents do not feel in control of their pension savings, according to research by Hymans Robertson.
- More than two-thirds (71%) of millennial respondents do not understand or are unsure about their pension investments, according to research by Barnett Waddingham.
Research shows that more respondents would contribute more to their pension if they could afford to, but saving for a house and paying off the mortgage remain the top priorities for Millennials and Gen X.
However, just over half (52%) of baby boomer respondents (aged 50 and above) in the Barnett Waddingham research name retirement as their biggest financial priority and 43% say the financial pressure of retirement keeps them awake at night.
What can you do to help your employees save for retirement?
Employers need to empower employees to take back control of their retirement savings, and there are some ways you can do this through your employee benefits scheme:
Financial education is becoming an increasingly important employee benefit, and many organisations are using technology to help their employees make informed financial decisions.
Online games, apps and portals can help employees understand how much they may need to save to achieve their retirement goals. Videos and animations can help employees understand how pensions work, or how to decide on their retirement goals and work out how much to save.
But financial education benefits shouldn’t just be limited to pensions education. Providing guidance on improving employees’ financial situation can also help them reduce their monthly outgoings, meaning that they can save more towards their retirement.
Help employees save
Perhaps the main way employers can help their employees save towards their retirement is through employer pension contributions. However, with tight budgets, companies can’t always be as generous as they want to be.
There are some ways to help employees save money so they can put more into their pension pot. For example, the following benefits help employees reduce the proportion of their salary they spend on everyday items, which means they can put a little extra into their pension scheme:
- Prepaid cashback cards
- High Street Discounts
- Travel discounts
- Leisure discounts
- Online cashback deals
Offer retirement planning tools
Giving employees access to retirement planning tools so that they can make informed investment choices is a good way to help employees take back control of their retirement savings: this could include online or third-party investment advisory services, or offering the services of an Independent Financial Advisor, who can manage employees’ pensions for them.
One reason people aren’t saving enough for retirement is that often they don’t understand all the options available to them. And while responsibility for ensuring you have enough for your retirement is shifting to the individual, HR professionals need to ensure that they are communicating their employee benefits and engaging with employees so that they do understand the benefit options available to them. This can help employees make informed decisions and feel more in control.
It’s also crucial that your employee benefit communications include pensions as a key benefit, even if the law requires employers to have pension provision in place for employees. Get the support of your marketing team and adopt a consumer approach (promote and inform) to pensions communication to grab the attention of your employees and engage them.
Employers can have a significant influence on how their employees feel about their retirement. But by using their employee benefits scheme to educate employees and help them save more, employers can help employees feel more confident about their financial future.