A new survey by Aviva found that more than one in five (22%) employees in the UK are not confident about planning for a financially comfortable retirement. This could be around 6.3 million employees in the UK.
The survey also found that younger employees are more positive about their retirement finances than older employees. More than a quarter (26%) of over 45-year-old employees said they were not confident about retirement planning compared to one in five (20%) 16–44-year-olds.
Aviva also found that most employees say their pension will only provide enough money to “just get by” in retirement (39%). Only one in five (20%) said their pension would be enough to retire comfortably, and one in ten (10%) have no idea.
Emma Douglas, Director of Workplace Savings & Retirement at Aviva, said: “Pension freedom legislation has given people more flexibility and choice when it comes to choosing how to use savings at retirement, but it has also created a wealth of options. It is desperately concerning that many pension savers are overwhelmed by the choices they face and are sleepwalking into retirement.”
Douglas added: “This is a particularly financially challenging time which makes it more important than ever that people understand their pension savings and the retirement options available to them. The pensions industry and government must work together to support today’s retirees.
“We are calling on government to support pension savers by ensuring they get access to some form of financial advice at retirement which may be full or simplified advice depending on their circumstances.
We are also asking for the removal of regulatory barriers to allow providers and other regulated entities to deliver more effective support, such as personalised guidance. We also feel more can be done to support employers in promoting pension advice and guidance through workplaces.”
Aviva’s tips for making sure retirement clicks into place:
- Start saving for retirement as early as possible.
- Aim to save at least 12.5% of your salary into your pension savings every month.
- Aim to build a pension pot of at least 10 times your annual salary by retirement.
- Get financial advice to help you make the most of your pension savings.
- Keep checking your annual pension statements to track your progress.
- Use online tools to help you plan for retirement.
- Reframe your expectations about retirement and how much money you will need.
- Check with the pension tracing service to find any lost pension savings.
Do not hesitate to contact us if you wish to discuss your situation.