Lethargy is stopping many employees from saving more for their retirement while the majority of employers admit they could do more to support employee financial wellbeing regarding pensions.
This research, by Aon, found one in three employees said nothing was preventing them from saving more. This figure was higher than the number given for those who said they couldn’t afford to save. TIme pressure though also appears to be a factor, with one in five early to mid-career employees said they were simply ‘too busy’ to sort out their finances.
The survey also found that one in four people do not think they will retire, and that 87 per cent are expecting a shortfall in retirement income, based on their current provision.
Meanwhile Aon found 61 per cent of employers said they did not think they were doing enough to support employee financial wellbeing and pensions through communications.
A further issue appears among employer actions and employee perception. Sixty-five per cent of employers stated that they are offering financial education services to employees, yet only 15 per cent of employees think that their employer provides good support.
There is also a disconnect when it comes to communication. for example just over 30 per cent of people over the age of 55 state that email is their preferred method of communication, for instance, yet 71 per cent of schemes use email as their main communication method.
Martin Parish, UK lead, workplace pensions & financial wellbeing, Aon, says:
“There are clearly tensions in financial wellbeing delivery. One is that employees tend to follow the employer’s lead.
For example, Aon’s research tells us that many people have the capacity to save, yet not the time or motivation. If employers feel they can play a vital role in supporting employees, then the workplace can act as a powerful conduit of support. Employers can give time to employees so they are able to manage their finances and long-term savings – much like they’d provide time for learning and development – and it is especially important now with so many people working very long hours.”
Aon’s research found that financial wellbeing should also feed into workplace resilience; if employees are not worried about health or finances, they are likely to be more productive and efficient.
Parish adds: “Financially stressed employees can be distracted and disengaged at work. They may spend significant portions of their day worrying about money.
“By providing them with the ability to understand their challenges and the time to set goals and manage issues, employers can move from lethargy to action. Not only will they help an individual employee’s resilience, but also the resilience of their workforce as a whole.”
These findings came from two separate studies: Aon’s DC pension and financial wellbeing employee research 2021 and Aon’s Benefits & Trends 2021 Survey.
