UK adults are less concerned about saving for retirement than they were a year ago and since Covid are more concerned about shorter term savings, according to research commissioned by workplace savings provider Cushon.
Concerns about saving for retirement have reduced by 20 per cent overall when compared to last year, as 73 per cent of individuals, across all age groups, agree that the Covid-19 crisis has made them realise that whilst pensions are important, having savings they can access if needed is equally important.
Although concerns about retirement are down, 16 per cent of people worry about how to manage credit and debit card debt and 24 per cent are concerned about how to save consistently. The research found 22.5 per cent of under 35-year olds wonder how they will afford to buy a new home. Just 7 per cent had no financial concerns at all.
The same research also found that 87 per cent of employers say worries about finances have a negative effect on an employee’s performance at work.
The research found 41 per cent of employees would like to see their employers implement a pension redirect arrangement, where they allow some of their pensions contributions to be redirected into a separate more accessible savings pot to cover more immediate and medium-term financial priorities. Under such an arrangement employers and employees still contribute the minimum auto enrolment levels to the pension scheme, and employees have the opportunity to top up accessible savings contributions just as they would a pension. Amongst under-35s, 49 per cent wanted to see a pension redirect arrangement.
Cushon recently rebranded from Smarterly, which bought the Salvus Master Trust in April.
Cushon head of proposition Steve Watson says: “Financial wellbeing is an important part of the employee benefit mix – thanks to auto-enrolment most employees now have a pension but saving for retirement is not a priority for everyone. Employees – young and old – need to be supported throughout their working lives and a good financial wellbeing programme can provide this.
“The reality for a lot of younger employees is that getting on the housing ladder is more important than planning for retirement. This isn’t to say that pensions aren’t important, they just aren’t a priority. By helping employees deal with the most pressing needs first, employees will engage more with the longer- term stuff like planning for retirement.”
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