Employees want more retirement planning support

Many employees would like more financial education support from their employer to help understand their pension savings and the choices available to them when they eventually stop working.

A new survey by Aviva -- one of the UK's largest workplace pension providers -- found that more than one in five (22%) employees are not confident about planning for a financially comfortable retirement.

What's more, those closest to retirement are less confident than their younger colleagues about their post-work finances. More than a quarter (26%) of employees over the age of 45 said they were not confident about retirement planning compared to one in five (20%) of those aged 16-44.

Comfortable retirement vs just getting by

Most employees believe their pension will only provide enough money to "just get by" in retirement (39%), according to Aviva's Working Lives Report 2023: Fit for Future. Only one in five (20%) said their pension would be enough to retire comfortably, and one in ten (10%) -- which potentially equates to around 2.85 million employees -- have no idea.

The current economic uncertainty has added to people's financial concerns, with almost three quarters of employees (72%) saying that the cost-of-living crisis has made them feel more anxious about their finances.

Almost four in five (79%) employees would like more support from their employer about planning for a financially comfortable retirement, such as information on how to build up a pension pot and how to make a pension last throughout retirement.

In separate research by investment comparison site Investing Reviews, nearly a third of employees said their employer has provided no help or guidance at all when it comes to understanding their workplace pension and what options they will have when they reach retirement age.

'Overwhelmed by the choices'

"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," said Emma Douglas, director of Workplace Savings & Retirement at Aviva. "It is desperately concerning that many pension savers are overwhelmed by the choices they face and are sleepwalking into retirement.

"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.

"Whether you want to consolidate your pensions into one pot; work out whether drawdown or an annuity or a blended option is right for you; or how to make sure your pension savings last throughout retirement; getting the right advice, guidance and support is essential."