Almost three-quarters of UK employees believe they are facing a more stressful retirement than their parents, with one in five thirty-somethings said to be struggling with both immediate and long-term finances.
Whilst 60 per cent of workers in their 50s are not worried about their financial prospects, research by professional services firm Willis Towers Watson found that considerations like student debt, housing and childcare costs were distracting workers in their 20s and 30s from thinking about long-term savings.
Compiling data from over 30,000 employees in 19 countries, The Global Benefits Attitudes Survey found that the average UK worker expects to retire just over the age of 65, but most remain pessimistic about how long their retirement savings will last.
Around 55 per cent of workers believe their retirement savings will be gone within 25 years of retirement, whilst 39 per cent feel saving will run out within 15 years.
Commenting on the survey, senior consultant at Willis Towers Watson, Minh Tran, said: “The immediate financial priorities facing younger employees can make it difficult to prioritise long-term issues such as retirement savings. Employees overwhelmingly anticipate less wealth in their retirement, compared to their parents’ generation.”
Worrying about financial security can have a damaging impact on employees’ ability to perform. The survey showed that financial stress prevented 39 per cent of respondents from doing their best at work. Workers that didn’t worry about finances were found to take an average of three absence days per year, whereas those struggling with finances were found to take off seven days per year on average. One in five people claimed that financial worries had a negative effect on their life more generally.
Tran went on to say: “Employers can help their employees when it comes to tackling individual financial anxieties and priorities. The aim should be to help employees with short and medium term financial goals as well as more established long-term retirement savings.
“A shift by employers from a focus on ‘retirement savings’ to help with ‘wealth creation’ can lead to greater employee satisfaction and engagement.”
Despite people’s financial concerns about the future, financial satisfaction was found to have increased in the last two years. Over half 52 per cent of UK employees were satisfied with their financial situation in 2015 – higher than the 42 per cent satisfaction rate reported in 2013 – indicating that wage increases and lower inflation had lifted the UK economy from the worst of the recession.
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