Workers not confident about retirement
More then six out of 10 (64%) workers are not confident they will retire at their target age, according to research from Aegon.
More than a third (36%) of respondents said they plan to continue working in their current role until they have enough saved, and over a quarter (28%) expect their employer to create a part-time or flexible role for them as they reach retirement age.
Finance professionals, who have the highest average pay of £38,000, expected to retire the earliest at 62, while those working in education, with an annual salary of £26,000, expect to retire later at 64.
Those working in admin reported a relatively low average income of £23,000, yet expected to retire relatively early compared to other professionals at 63.
Aegon UK managing director, workplace pensions, Angela Seymour Jackson said that UK workers are waking up to the reality that they will probably have to work past their planned retirement age to make up for shortfalls in their savings.
“With so many expecting to work on past traditional retirement age on more flexible contracts, employers will need to move quickly to accommodate this new later-life work culture,” she said.
“Creating a flexible and inclusive workplace strategy won’t only benefit those working longer to hit their savings targets but, according to recent research, will also prove good for business, adding £100 billion to UK productivity."
She added: “While there are benefits for the economy in older people staying in the workforce, it should be a matter of choice as to whether people continue working and not simply down to a lack of savings. For this reason it’s important that pension providers and employers engage workers early with their pension in order that they understand how on track they are with their savings.”
The report coincides with new figures released by the Department of Work and Pensions (DWP), which revealed that an extra £3.1 billion was saved in pension plans in 2014 than in 2013, totalling an annual contribution of £42.9 billion.
The Workplace pension participation and saving trends report found that the biggest increase in participation was seen in the 22 to 29 age group, with participation rates increasing from 30% in 2013 to 54% in 2014.
DWP attributes this increase in participation to auto-enrolment.
Hargreaves Lansdown head of corporate pension research Nathan Long said auto-enrolment had "delivered a shot in the arm to saving in private sector workplace pensions".
He added: "The large increase in participation in young and low-paid workers is particularly pleasing. Thought must now turn to ensuring these people who are new to pensions are given the help they need to make confident decisions when they come to retirement.”