One in 10 are worried they can’t afford to retire

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One in 10 people (13%) are worried they will never be able to afford to retire, according to research from the CIPD.

The Employee Attitudes to Pay and Pensions report also revealed employees in defined contribution (DC) pension schemes think they should be contributing more to their pension pots. The average employee contribution to DC pension schemes is 5%, but 43% of workers think they should double that to 10% or more.

CIPD reward policy adviser Charles Cotton warned of a “looming pensions crisis”. “Auto-enrolment has been successful in getting six in every 10 eligible workers saving through a workplace scheme, but their ability to contribute adequately is being severely hampered by poor wage growth,” he said.

“Until the government and businesses can tackle the root causes of the UK’s productivity challenges, we won’t see the wage growth needed to improve individual pension contributions, and people may need to stay in work a lot longer to have a sufficient income.”

The survey also found nearly two-thirds (61%) of people have considered working beyond the state pension age. Almost half (47%) would like to have a permanent job; of those 31% would prefer a part-time role over full-time (16%). One in 10 (10%) would rather take up employment on a casual, temporary, self-employed or fixed-term basis.

The research found employees in larger businesses expect to retire at 65, those in small businesses at 66 and those in micro businesses at 68. Those who aren’t saving via a workplace pensions scheme think they will work until they are 67, with 7% saying they expect to work until they are over 70.

Cotton said businesses and HR professionals need to be prepared for the possibility that more than half of the workforce will want to be employed beyond the state pension age.

“To support them, and reap the benefits of an age-diverse workforce, [employers] need to think carefully about how they will manage and support these individuals, from training and development through to reward schemes, reasonable adjustments in the workplace and wellbeing support,” he said.

“We need a collaboration between employers, employees and the government to
ensure that workers are getting the financial information and education they need around retirement planning, and, if they do choose to work to a later age, that they get the support they need in the workplace.”

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